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MONTHLY REVIEW OF B U S I N E S S C O N D IT IO N S ISA A C B. NEW TON, Chairman of the Board and Federal Reserve Agent Federal Reserve Bank of San Francisco Vol. XVI San Francisco, California, October 20,1932 No. 10 T W E L F T H FE D ER AL RESERVE DISTRICT CONDITIONS Following the comparative stability recorded for June, July, and August, both manufacturing and trade activity in the Twelfth District in creased moderately during September in con trast with a downward movement in the corresponding months of 1930 and 1931. Com modity prices turned downward in midSeptember, and have continued to decline since that time, although the average level is still higher than in June. The position of District banks showed further improvement during September and the first half of October. Crop harvesting was practically completed in September under exceptionally favorable weather conditions. Estimates of larger crop production than in 1931 remained unchanged during the month, but marketing volume con tinued low. It now appears probable that crop income will be lower this year than in 1931, notwithstanding increased production and re cent advances in prices of some products. Records of industrial output indicate a slight upturn during September. Electric power pro duction decreased less than seasonally and construction was unchanged. California petro leum production continued to average slightly in excess of the proration schedules during September, and that excess increased consider ably in the first half of October, when allow ables were reduced sharply. Output of lumber remained unchanged during the month, al though a substantial decrease is usual. Main tenance of production in September this year was accompanied by a continued excess of orders over output. Decreases in cement and flour production approximately offset increases in the preceding month. There was little change in the employment situation. Improvement was reported in most states of the District, while both the number of employees in California and the amount of payrolls decreased somewhat more between August and September than has been usual in most other recent years. Department store sales and wholesale trade increased by the seasonal amounts during Sep tember. As in August, an increase in east- bound intercoastal traffic was contrary to the movement recorded at this season in most other recent years. Automobile registrations ad vanced from August to September, after sea sonal adjustment. The volume of Federal reserve credit in use remained practically unchanged between Sep tember 21 and October 19 following substantial decreases in the two immediately preceding four-week periods. Additional issues of national bank notes continued to replace other forms of currency in circulation. Reporting member bank credit showed no net change during this period, since increases in investments in Gov ernment securities were offset by continued declines in loans. Government, time, and net demand deposits increased from September 21 to October 19. Agriculture The agricultural situation in the Twelfth District changed little during September and early October. Weather conditions were par ticularly favorable for the completion of the harvest of crops, but lack of rainfall in the Pacific Northwest hampered the sowing of win ter wheat. Ranges continued to furnish suffi cient feed in most areas and livestock marketed in recent weeks have been of somewhat better quality than a year ago. In contrast with the satisfactory growth and harvest of crops and development of livestock, prices received for farm products have con tinued to be extremely low. Some stability in prices was evident during September, but the level of quotations was far below that existing a year ago. The volume of agricultural prod ucts being marketed this fall is generally smaller than in the autumn of 1931. Most recent estimates of grain and field crop production show little change from those which appeared in the September Review. The vol ume of wheat, oats, and barley produced in the District will be greater than in either 1931 or 1930. The volume of beans, cotton, potatoes, 74 MONTHLY REVIEWOF BUSINESS CONDITIONS and rice raised this year is smaller than last, while the hay and sugar beet crops are some what larger. Harvesting of these crops is now practically complete. As with grain and field crops, estimates of deciduous fruit production changed little dur ing September. Estimates of apple production in the Pacific Northwest were revised upwards D E C ID U O U S F R U IT S A N D N U T S — P R O D U C T IO N (In thousands) F o r e c a s t! C a lifo rn ia A p p le s * .................................... b u . A p r ic o t s .................................. to n s C h erries .................................. to n s G ra p es .................................... to n s R a is in ..................................to n s T a b le .................................. ton s W in e .................................... to n s P e a ch e s ....................................to n s C lin g s to n e ........................ to n s F r e e s to n e ...........................to n s P e a rs .......................................to n s P lu m s .......................................to n s P r u n e s ...................................... to n s A l m o n d s .................................. t o n s W a ln u ts .................................. to n s 1932 6,063 256 17 1,861 1,177 308 376 584 368 216 238 68 181 14 41 1931 4,647 277 23 1,320 775 229 316 579 397 182 218 65 208 15 29 1930 6,522 200 18 2,181 1,307 388 486 796 542 254 272 82 274 14 30 O re g o n A p p le s * ....................................b u . C h erries .................................. ton s P e a rs .........................................b u . P ru n es (d r ie d ) ....................to n s P ru n e s (fr e s h ) ....................ton s 3,150 11 2,880 20 36 2,079 8 1,995 27 22 4,470 13 3,200 26 25 W a s h in g to n A p p le s * .................................... b u . C h erries .................................. to n s P ea rs .........................................b u . P e a ch e s .................................. b u . P ru n e s (fr e s h ) ................... to n s 24,516 15 3,723 1,320 23 25,893 10 3,650 1,050 11 33,597 17 4,500 556 19 Id a h o A p p le s * ....................................bu . P rune's (fr e s h ) ....................to n s 4,290 26 3,969 20 4,650 22 U n ited States A p p le s * .................................... b u . P ea rs .........................................b u . P e a ch e s .................................. b u . 8 3,724 22,154 46,267 103,776 23,009 77,743 101,004 27,577 53,286 * C o m m e r c ia l c r o p . f L a t e s t fo r e c a s t a v a ila b le f o r e a ch fru it. S o u r c e : U n ite d S ta te s D e p a r tm e n t o f A g r ic u ltu r e . as satisfactory growing weather prevailed. The marketing of this year’s grape crop in Califor nia is progressing slowly. While the crop is estimated to be 40 per cent larger than in 1931, the volume of this season’s shipments to Octo ber 1 was only 16,900 carloads, an amount 18 per cent smaller than shipments during the corA g r ic u lt u r a l M a r k e t in g A c t iv ity t -------- S eptem ber-------- \ C a rlo t S h ip m e n ts D e c id u o u s F r u it . C itru s F r u i t .......... V e g e t a b l e s ............ E x p o r ts W h e a t ( b u .) . . . . B a rle y ( b u .) . . . . 1931 21,748 5,605 4,064 23,045 5,448 4,056 48,736 71,497 42,326 60,182 75,669 50,377 435,492 884,275 2,856,157 578,492 1,647,015 1,957,857 6,093,928 1,871,648 58,336 123,364 677,049 116,317 380,073 1,545,818 3,089,782 1,306,953 62,211,742 15,252 2,092 411,074 1,234,897 3,734,732 1,454,939 61,351,869 17,661 674 R e c e ip t s 45,005 C a ttle* .................... 121,024 H o g s * ...................... . 495,868 S h eep * .................... . 103,896 E g g s (c a s e s ) B u tte r ( l b . ) .......... 6 , 1 3 3 , 5 5 6 7,494 W h e a t ( c a r lo t s ) . 824 B a rle y (c a r l o t s ) . S to r a g e H o ld in g s (e n d o f m o n th ) W h e a t ( b u .) .......... 2 ,917,000 B ea n s ( b a g s ) .......... 1 ,155,517 B u tte r ( lb .) ............ 5 ,246,091 468 ,902 E g g s (c a s e s ) . . 5 ,756,392 6,226 499 12,042,000 1,775,114 3,450,273 410,694 *Los Angeles receipts not included. /— Season to D ate—s 1932 1931 1932 October, 1932 responding period of last year. Similarly, the 1932 commercial crop of apples in the five prin cipal producing states of the District is esti mated to be 5 per cent larger than in 1931; yet shipments for the season to October 1 were 32 per cent smaller in amount this year than last. In relation to the average of the preceding five years, this year’s crops of grapes and ap ples show decreases of 8 and 7 per cent, respec tively, whereas the season’s shipments have been 41 and 17 per cent smaller, respectively. During September, there were no changes in production estimates of the 1932 orange and lemon crops in California, the Valencia orange crop being larger, and the lemon crop some what smaller than a year ago. Trade factors estimate that the 1932-1933 Navel orange crop, picking of which will commence about Novem ber 1, will be approximately 7 per cent larger in volume than the marketings of last season’s crop. Butter receipts at Pacific Coast markets usually decline during the autumn months. The decline during September of this year was smaller than in September, 1931, however, and on October 1, storage stocks of butter were 34 per cent heavier than on the same date a year ago. Reflecting larger inventories, butter prices showed less than the usual seasonal increase during September. Egg receipts in September were smaller than in any other month since November, 1929. Storage stocks declined 19 per cent from September 1 to October 1 and on the later date were only 14 per cent larger than on October 1, 1931. Egg prices have ad vanced seasonally in recent weeks. Factors affecting the livestock industry in the District did not change during September. Receipts of cattle and lambs at Pacific Coast markets were less numerous than a year ago, when poor range conditions resulted in large marketings of stock. Returns to producers for stock marketed in recent weeks have been the lowest in many years. Fall ranges are furnish ing satisfactory forage and large quantities of hay and grains are available for supplemental feeding, if needed during the forthcoming win ter months. The number of lambs and cattle moving to feedlots thus far this fall has been smaller than in 1931. Favorable range and uncertain market and financial conditions have tended to restrict feeding operations. Industry A moderate increase in industrial activity was indicated by Twelfth District figures for September. Adjusted indexes of lumber pro duction and of electric power output advanced, while activity in the construction industry changed little. Petroleum output was about the October, 1932 FEDERAL RESERVE AGENT AT SAN FRANCISCO 75 same in September as in August. Output of reach a peak during the summer months, when requirements for pumping irrigation water are cement and flour declined. Reports from most states in the District, ex usually largest, and to show considerable re cept California, indicate an improvement in cession during remaining months of the year. employment during September after allowance During the spring and early summer of this for seasonal factors. In California, however, year, however, the use of power for irrigation where there had been a substantial increase in PERCENT the preceding month, total employment de creased somewhat more than seasonally, largely as a result of sharper than usual decreases in the food industries. The number of employees in the textile, clothing, and furniture industries in that state was larger than in August, how ever, according to the State Department of Labor, and most of the large increase in motion picture forces reported during August was re tained in September. The reduction in employ E L E C T R I C P O W E R P R O D U C T I O N - T w e l f t h D istrict ment from the corresponding month in the pre (1923-1925 average=100) ceding year was much smaller in September than in August and was the smallest for any did not expand by the customary amount, with month since March, 1930. Continued efforts of the result that this Bank’s seasonally adjusted the Twelfth District Industrial and Banking index declined during May and June. Con Committee have helped to create new jobs and versely, since the usual quantity of power had spread available work over the greatest possible not been used during the summer for pumping, number of employees, principally by reducing the decline in this usage was less in September the hours of labor. Total wage payments in than in past years. This factor was at least September showed a slightly smaller decline partly responsible for a sharp upward move in relation to last year than had been the case ment in the adjusted index of electric power in immediately preceding months. On the other production during September. hand, the decrease in average weekly earnings As in the previous month, California petro of individuals was somewhat greater in Septem leum production slightly exceeded the proration ber than it had been in August or July and both allowable of 475,800 barrels daily. New sched total wages paid and average earnings declined ules reducing daily output to 440,000 barrels more than did the number of employees. were supposed to become effective October 1, Production of electric power declined less but production averaged about 472,000 barrels than seasonally during September and aver daily during the first two weeks of October. aged only about 8 per cent lower than in Sep tember, 1931, the smallest year-period decline since February. It is customary for output to E m p l o y m e n t — -Californiia--------- % t N o . of N o . <■—E m ployees —> N o. of Sept., Sept., of Firm s 1932 Firm s 1931 ( In d u s t r y — In dexes of daily average produ ction , adjusted fo r seasonal variations (1923-1925 daily averag:e=100) ,------------ 1932 Sept. A u g . July June G en eral 34 32 C a rlo a d in g s — I n d u s t r i a l.. 31 E le c t r ic P w r . P r o d u c t io n . 143 If 135 134 135 M a n u fa c tu r e s 35 35 L u m b e r .................................. 37 33 131 131 144 R e fin e d M in e ra l O i l s t . . . 127 85 103 109 F lo u r ....................................... 93 90 S la u g h te r o f L iv e s t o c k . . 94 87 51 43 45 C em en t .................................. 42 82 108 128 W o o l C o n s u m p t io n ! . •. . M in era ls P e tr o le u m (C a lifo r n ia ) f . 73H 73 L e a d (U n it e d S ta te s ) 41 33 S ilv e r (U n it e d S t a t e s ) $ . 37 41 B u ild in g and C o n s tr u c tio n § 32 T o t a l ...................................... 33 B u ild in g P e r m its — V a lu e 10 10 L a r g e r C i t i e s ............ S m a lle r C ities .......... 13 13 E n g in e e r in g C o n tra cts A w a r d e d — V alue 63 T o t a l ............................. 63 E x c lu d in g B u ild in g s . 122 123 ---------- 1931----------> Sept. A u g. July 54 56 53 155 153 159 54 146 102 102 56 91 53 140 88 99 57 101 61 137 101 98 71 111 72 31 40 71 49 41 77 67 39 77 61 45 79 64 43 29 29 62 72 71 12 14 13 14 30 33 32 36 33 41 53 96 49 92 107 189 128 238 123 210 fNot adjusted for seasonal variations. JPrepared by Federal Reserve Board. §Indexes are for three months ending with the month indicated. flPreliminary. Industries A ll Industries* 147,789 (-9 .7 ) 163,579 59 4,720 ( — 2 2 .7 ) L u m b e r and W o o d M a n u fa c tu r e s . . 134 12,716 ( — 2 2 .1 ) 6,110 S to n e , C la y and G lass P r o d u c t s .. 16 1,481 ( — 8 .0 ) C lo th in g , M illin e ry and L a u n d e r in g . 163 12,188 — 11.1) F o o d , B e v e ra g e s and and T o b a c c o . . . 303 50,297 ( .1 ) P u b lic U tilit ie s . . . 41 48,105 ( — 8 .7 ) O th e r I n d u s t r ie s ! 511 60,219 — 13.6) ( M isce lla n e o u s . . . . 48 6,168 (4 .6 ) W h o le s a le and 195 32,618 ( — 8 .0 ) 16,324 1,609 13,709 50,260 123 - O regon N o . of r - E m ployees —» Sept., Sept., 1932 1931 16,551 ( -1 7 .7 ) 20,119 7,522 ( - -1 7 .4 ) 7 798 ( - -3 4 .3 ) 210 6$ ( - -1 6 .7 ) 9,109 37 3,726 ( - -1 9 .9 ) 4,652 30 4,295 ( - -12.2) 4,892 43 1,214 252 52,671 69,607 5,897 35,449 * P u b lic u tilitie s an d w h o le s a le and retail figu res n o t in c lu d e d in this to ta l, f I n c lu d e s the fo llo w in g in d u s t r ie s : M e ta ls, m a c h in e r y and c o n v e y a n c e s ; le a th e r and r u b b e r g o o d s ; oils and p a i n t s ; p r in tin g an d p a p e r g o o d s . ^ L a u n d e rin g o n ly. Figures in parentheses indicate percentage change from Septem ber, 1931. 76 MONTHLY REVIEWOF BUSINESS CONDITIONS Although the quantity of crude oil run to re fineries decreased during September, inven tories of gasoline did not change materially and were larger than at the close of September, 1931. Since September, 1929, production of both crude and refined oils has been reduced more than fifty per cent, drilling of new wells has been sharply restricted, and there has been a substantial decrease in the number of wells operating. Although the cut of lumber usually declines sharply between August and September, out put increased in the later month this year, an expansion of activity in the Douglas fir area having slightly more than offset reduced opera tions in the western pine regions. This Bank’s adjusted index rose from 33 (1923-1925 aver age = 100) in August to 37 in September. In September, 1931, the index stood at 54. The ratio of orders for lumber to production con tinued to increase, however, orders increasing to an amount nearly as large as in September, 1931. The value of building and construction re ceded seasonally in September. A decrease was shown in total engineering contracts awarded, although street and road undertakings in creased considerably. September value of building permits in 90 cities of the District remained practically unchanged, after allow ance for seasonal factors. The relatively higher level of engineering contracts awarded, in com parison with building permits, during the past year or two has resulted almost entirely from intermittent activity in certain fields stimulated by Federal and State Governments. Output of flour, which had been at a fairly high level during earlier months of the year, D is tr ib u t io n a n d T ra d e C a rlo a d in g s$ T o t a l ........................... M e r c h a n d i s e ............ — ,-----------1931----------,---------------1932---------------- S ept. A u g . July June Sept. A u g. July In d exes adjusted fo r seasonal variations (1923-1925 average =1 0 0 )------ -------- ^ r F o r e ig n T r a d e 0 T o t a l f ........................ I m p o r ts f ................... E x p o r ts ...................... 52 68 57 74 55 75 71 84 72 85 45 40 48 45 39 48 45 42 47 75 63 81 77 61 83 78 64 83 81 101 In t e r c o a s ta l T r a d e T o t a l ........................... W e s t b o u n d .............. E a s t b o u n d ................. 55 53 54 49 61 47 45 72 39 51 57 50 80 86 76 65 82 62 59 85 53 R etail T r a d e A u t o m o b ile S a le s ? T o t a l ...................... P a s s e n g e r ............ C o m m e r c ia l .......... 33 31 47 29 28 48 30 28 50 47 45 71 58 54 97 56 49 97 67 62 110 D e p a r tm e n t S to r e S a l e s ? ...................... S t o c k s § ................. 73 63 73 63 72 67 A 74 70 fl *■* 92 86 100 87 100 87 39.6 14.0 38.6 14.4 39.2 13.4 40.1 13.8 41.5 15.1 C o lle c tio n s # R e g u la r ............ In s ta llm e n t . . . t 41.2 15.9 42.3 15.3 $ D a ily a v e ra g e . ° I n d e x e s a re f o r th ree m o n th s e n d in g w ith m o n th in d ica te d . t E x c l u d i n g ra w silk. § A t end o f m o n th . # P e r c e n t o f c o lle c t io n s d u r in g m o n th t o a m o u n t o u ts ta n d in g at first o f m o n th . October, 1932 decreased in September, although there is usually an increase during that month. De spite this decrease, inventories of flour were larger at the end of the month than at its be ginning. Mills also reported large additions to their stocks of wheat as is customary at this season. During recent months millers’ stocks of both wheat and flour have been larger than in the corresponding period of 1931, but con siderably smaller than in either 1930 or 1929. As in the United States as a whole, the quan tity of wool consumed by Pacific Coast manu facturers has been at relatively high levels dur ing the past few months, the daily average amount being larger in August than in any month, except November, 1931, since compa rable figures were first compiled in 1922. During each of the past two years, wool consumption has declined to unusually low levels in the spring, but has increased sharply during the summer and autumn. Trade The value of department store trade was seasonally higher in September than in August. Approximately the usual changes were reported by stores in most cities of the District, except R E T A I L T R A D E — T w elfth D istrict Percentage changes in value o f sales and sto ck s w ith no adjustm ent fo r p rice changes 1932 com pared with 1931 - N E T S A L E S - ------ > STO CKS January 11 to end Septem ber o f Septem ber Septem ber 22.1 ( 68) — 24.4 ( 66 ) — 26.8 ( 5 3 ) 15.9 ( 10) — 29.4 ( 9 ) — 23.3 ( 10) 25.4 ( 8 ) — 26.2 ( 8) — 24.8 ( 6 ) 26.8 ( — 22.8 ( — 30.8 ( 4 ) 4) 4) 19.7 ( — 20.4 ( — 23.4 ( 7 ) 7) 7) 26.3 ( 8 ) — 22.4 ( 8) — 20.8 ( 8 ) — 35.0 ( 7 ) 32.5 ( — 32.3 ( 6) 7) 28.4 ( — 30.8 ( — 24.5 ( 5) 5) 5) 29.3 ( — 23.6 ( 4 ) 4) — 20.6 ( 4 ) 30.5 ( 4 ) — 26.0 ( 4) — 11.0 ( 3 ) 25.7 ( 2 4 ) — 25.4 ( 22 ) — 28.4 ( 15) 29.4 ( 37) — 30.7 ( 35) — 27.4 (2 9 ) — 25.2 (1 2 3 ) 23.3 (1 2 9 ) — 27.0 (9 7 ) t— D e p a r tm e n t S to re s . . . L o s A n g e le s ............... O th e r S ou th ern C alif. O a k la n d ........................ S an F r a n c i s c o ............ O th e r N o rth e r n C alif. P o r t l a n d ! ...................... — — — — — — — — S p o k a n e ........................ — Salt L a k e C i t y ............ — A p p a r e l S t o r e s ............... — F u rn itu r e S t o r e s ............ — — f ln c l u d e s five app arel s to re ’s w h ic h are n o t in c lu d e d in D is t r ic t d e p a rtm e n t sto re total. F ig u r e s in p a ren th eses in d ica te n u m b e r o f sto re s r e p o r tin g . N o te : These? fig u re s tak e n o a c c o u n t o f o p e r a tin g c o s ts . in Oakland where there was a decline. The reduction in sales value from the correspond ing month in 1931 amounted to 22 per cent, whereas the number of sales transactions was only 5 per cent less, the difference reflecting principally the decrease in retail prices at de partment stores. Merchandise inventories did not increase quite as much as is customary dur ing the month. Wholesale trade also expanded seasonally during September. Sales of dry goods, electri cal supplies, furniture, shoes, and paper and stationery increased by more than the average amount, while the value of agricultural imple ments sold was considerably smaller. Total sales were 19 per cent lower than in Septem- October, 1932 ber, 1931, as compared with a year-to-year de crease of 23 per cent in August. During September, as in the previous month, intercoastal trade expanded because of a con trary to seasonal increase in eastbound traffic through the Panama Canal. The increase was due entirely to larger cargoes of commodities other than lumber and petroleum, an increase in tonnage of the former offsetting a decline W H O L E S A L E T R A D E — T w elfth D istrict Percentage changes in value o f sales with n o adjustm ent fo r p rice changes Septem ber, 1932 C um ulative 1932 t ------com pared w i t h --------- 1---- com pared A u g ., 1932 A g ric u ltu ra l I m p l e m e n t s ..........— 7.8 A u to m o b ile S u p p l i e s ................... 1.0 D r u g s .................................................. 3.4 12.4 D r y G o o d s ......................................... E le ctrica l S u p p l i e s ........................ 27.8 F u r n i t u r e .................................... .. 22.2 G ro c e r ie s ........................................... 9.1 H a r d w a r e ........................................... 5.7 S h oes .................................................. 18.8 P a p e r and S t a t i o n e r y ................... 11.1 A ll L i n e s ............................................ 9.2 Sept., 1931 — 43.4 — 18.9 — 20.3 — 24.8 — 26.4 — 35.3 — 10.7 — 25.6 — 16.0 — 19.8 — 19.4 with 1931 — 39.0 — 20.1 — 20.3 — 33.8 — 43.4 — 37.0 — 18.3 — 30.2 — 29.8 — 21.3 — 25.9 N o t e : T h e se fig u re s take n o a c c o u n t o f o p e r a tin g c o s ts. in the volume of petroleum shipments. Atlantic to Pacific traffic receded more than is custom ary during the month. This Bank’s seasonally adjusted index of au tomobile registrations advanced from August to September. Daily average sales of trucks were seasonally larger than in the preceding month, and the number of passenger cars reg istered declined less than is customary. Prices Declines in prices of farm products, nonferrous metals, and some other commodities during the last half of September checked the upward movement in weekly price indexes that had lasted from mid-June to the second week of September. By mid-October these indexes had declined to the levels of early August. The Bureau of Labor Statistics’ monthly index of wholesale prices was 65.3 (1926 = 100) in Sep tember, 65.2 in August, and 69.1 in September, 1931‘ Retail food prices in the principal cities of the Twelfth District as compiled by the United States Bureau of Labor Statistics have de creased substantially since September, 1929. During the three years ended September, 1932, retail food prices declined about 33 per cent in San Francisco, 35 per cent in Portland and Seattle, and 39 per cent in Los Angeles and Salt Lake City. The decline in the United States over this same period amounted to 36 per cent. Wheat, barley, and rice prices declined dur ing September at important District markets and in early October approached the low levels of mid-July. Continued stability in prices of 77 FEDERAL RESERVE AGENT AT SAN FRANCISCO hay, beans, and potatoes was in contrast with the decline in grain prices. Cotton prices de clined during September and early October, but in the middle of the later month remained approximately 40 per cent above the year’s low price which was established in June. California pears, lemons, and oranges sold in Eastern auc tion markets during September at somewhat higher prices than in August. Quotations on apples changed little during the month, while grape prices declined and in late September were lower than in September of either 1931 or 1930. Dried fruit prices were relatively stable during September with the exception of quota tions on raisins which continued to decline. Opening prices for 1932 packs of canned fruits in California ranged from 7 to 22 per cent lower than a year ago. Hog prices declined season ally. Cattle sold at west coast markets during September brought lower prices than in any other month of this year, but prices for good quality lambs increased. As in other recent months, the price of Cali fornia crude oil and its products remained com paratively stable through September, although the retail price of third structure gasoline was advanced 1 cent per gallon in Southern Cali fornia. Quotations for lumber did not change during the month. With the exception of cop per prices, which remained unchanged, quota tions for the principal non-ferrous metals— copper, lead, zinc, and silver— declined in Sep tember, offsetting increases during late August. B a n k D e b it s * A r iz o n a P h o e n ix C um ulative Sept. 1932 ...............$ C a lifo rn ia B a k e rsfie ld ......... B e rk e le y ............... 16,657 Sept. 1931 $ 25,207 t ------- N in e M on th s- ——\ 1932 $ 185,279 1931 $ 274,371 6,651 12,080 14,746 22,157 505,201 142,019 18,866 35,060 4,723 29,251 605,403 15,510 8,483 11,777 9,585 15,456 23,616 35,455 701,530 173,986 26,177 42,302 7,846 42,856 909,040 24,207 12,190 15,388 66,312 128,263 135,688 238,794 5,065,246 1,464,508 196,378 347 ,474 54,156 308,751 5,932,469 144,071 83,383 117,016 94,889 149,106 195,548 369,159 7,228,943 1,683,100 272,947 419,893 78,366 431,376 8,821,870 220,401 117,028 155,544 7,452 14,153 89,630 118,279 7,131 10,219 68,726 91,480 .............. 3,257 93,974 5,053 133,348 34,500 892,635 49,014 1,287,118 S alt L a k e C i t y . . 12,049 37,041 12,595 53,373 81,646 378,136 125,486 531,371 4,201 4,608 121,043 26,255 18,066 8,129 6,322 8,633 171,283 38,342 31,043 11,957 41,845 48,934 1,172,859 250,864 190,496 69,010 60,703 83,166 1,753,613 371,012 300,889 106,827 L o n g B e a ch . . . . L o s A n g e le s . . . O a k la n d ............... P a sa d en a ............ S a c r a m e n to . . . . S an B e r n a rd in o . San D ie g o .......... S an F r a n c is c o . . San J o s e ............ S an ta B a rb a ra . . S to ck to n ............ Id a h o N evada O regon P o r tla n d U tah W a s h in g to n B e llin g h a m T o ta l. ......... .$ 1 ,7 9 1 ,7 9 0 *In thousands of dollars. $2,561,162 $17,787,069 $25,391,499 October, 1932 MONTHLY REVIEWOF BUSINESS CONDITIONS 78 Credit Situation Banking conditions in the Twelfth District improved further during September and the first half of October. This improvement, fol lowing virtual completion of harvesting and substantial progress in the marketing of most agricultural products, was of a seasonal nature in country areas. Currency circulation did not change appreciably during the four weeks ended October 19. There was little change in reserve bank credit extended to the Twelfth District, but credit extended by reporting mem ber banks increased by a small amount. S U P P L Y O F A N D D E M A N D F O R B A N K IN G F U N D S T w elfth D istrict C hanges betw een Septem ber 22 and O cto b e r 19, 1932 (in millions of dollars) Supply M o n e t a r y g o ld s t o c k . . . — 7.2 12.8 T r e a s u r y o p e r a t io n s . . . . R e se r v e b a n k c r e d it . . . . — 1.6 D is c o u n t s ..........— 1.7 A c c e p t a n c e s ................ 0 O t h e r .............................1 ____ T o ta l . 4.0 D em and D em and fo r c u r r e n c y .... 1.2 M e m b e r b a n k re s e r v e d e p o sits ............................... 2.7 U n e x p e n d e d ca p ita l fu n d s , n o n -m e m b e r d e p o s its , e t c ............................................. ..... .1 T otal ................................ R E P O R T I N G M E M B E R B A N K S —T w e lfth D istrict (in millions of dollars) t ------------------- C on d !ition ------ L o a n s and In v e s tm e n ts — T o t a l . . , O n S e c u r i t i e s ............................. A ll O t h e r .................................... In v e s tm e n ts — T o t a l ................... U n ite d S tates S e cu ritie s . . . O th e r S e cu ritie s ...................... R e s e r v e w ith R e s e r v e B a n k N e t D e m a n d D e p o s it s ................. T im e D e p o s i t s .................................... D u e fro m B a n k s ............................... D u e to B a n k s ...................................... B o r r o w in g s at R e s e r v e B a n k . . O ct. 19, O ct. 12, Sept. 21, O ct. 21, 1932 1932 1931 1932 1,732 1,735 1,871 1,738 1,142 986 993 981 302 244 243 243 840 743 749 738 729 746 742 757 373 422 410 411 356 335 336 3 31 92 86 85 85 662 556 557 566 950 880 894 893 151 130 167 147 178 176 171 183 94 48 43 43 Federal reserve bank credit employed in the Twelfth District. New issues of national bank notes, which are based upon Treasury credit, continued to displace other types of currency, 4.0 A slight increase in total loans and invest ments of reporting city member banks between September 21 and October 19 resulted from the allotment of 27 million dollars of 3 per cent Treasury Notes to District purchasers on Octo ber 15. Of the District's allotment of these securities, one million dollars were paid for in cash, 15 million dollars were paid for by de posit credit to the Government, and the balance was accounted for by the exchange of maturing securities for the new. Loans on securities showed almost no variation during this fourweek period, while all other loans, which are largely for commercial purposes, declined. Total deposits increased during this period, a result of considerable expansion in both time and net demand deposits, as well as in Govern ment deposits. There was almost no change between Sep tember 21 and October 19 in the amount of F E D E R A L R E SE R V E B A N K O F SA N F R A N C IS C O (in millions of dollars) T o t a l B ills an d S e c u r i t i e s .......... B ills D i s c o u n t e d ........................... B ills B o u g h t .................................. U n ite d S tates S e c u r i t i e s .......... T o t a l R e s e r v e s .................................. T o t a l D e p o s its .................................. F e d e ra l R e s e rv e N o te s in C i r c u l a t io n ....................................... R a tio o f T o ta l R e serv es to D e p o s it and N o te L ia b ilitie s -------------- ----- Cone O ct. 19, O ct. 12, Sept. 21, O c t . 21, 1932 1932 1932 1931 189 245 183 185 57 63 59 104 2 2 84 3 123 123 123 55 211 210 175 210 148 173 147 146 232 55.5 235 55.1 235 55.1 228 43.7 the total remaining practically unchanged. On the basis of experience in previous years, cur rency circulation may be expected to increase during the remainder of 1932. Receipts of funds S A V I N G S D E P O S I T S —T w elfth D istrict Principal banks in seven larger cities (e n d o f m onth figu res). October, 1932 FEDERAL RESERVE AGENT AT SAN FRANCISCO from and payments to other districts were about equal, as were collections and disburse ments by the United States Treasury, with the result that there was little change in available banking funds in this area from these sources. MILLIONS Or DOLLARS MILLIONS OF DOLLARS C U R R E N C Y C I R C U L A T I O N — T w elfth D istrict C hanges cum ulated from January 2, 1929 M on th ly averages o f w e e k ly figures. Deposits of country banks with Twelfth Dis trict city banks have increased seasonally dur ing the past two months with improvement in the position of country institutions. The banks receiving these deposits, however, have been unable to find suitable employment for them locally. They have, therefore, sent them to eastern financial centers, notwithstanding the 79 extremely low yields available upon such funds in those cities. Reflecting the rather substantial transfers of banking funds out of the District, the net indebtedness of city banks to other banks has averaged lower during the past two months than at any time during the last 5 years, although the level is not much below that of late 1929. At that time, however, the under lying reason for the low level of net indebted ness of city banks to other banks was found in the attraction of the unusually high interest rates obtainable in New York money markets which drew banking funds from both country and city banks in this area to that city. Savings deposits of leading banks in the principal cities of the District were somewhat higher in September than in August. These de posits were much lower than in September, 1931, however, except in San Francisco where the decrease in comparison with last year was small. Successive reductions in open-market rates in New York during 1932 have not been re flected in an easing of rates charged customers by banks in this region. There was no change in such rates by city banks during October, the average remaining somewhat higher than in July and August. Stock exchange volume and value of trading on the principal Pacific Coast markets was con siderably less in September than in August or in September, 1931. SU M M AR Y OF N A T IO N A L CONDITIONS Prepared by the Federal Reserve Board Industrial activity and shipments of com modities by rail increased from August to Sep tember by considerably more than the usual seasonal amount. There was also a more than seasonal increase in the volume of factory em ployment and payrolls. The general level of prices, after advancing for three months, showed a decline beginning in the early part of Sep tember. Production and Employment. Volume of in dustrial production, as measured by the Board's seasonally adjusted index, based on the 19231925 average, increased from a low point of 58 in July to 60 in August and 66 in September. The advance in September reflected chiefly large increases in activity at textile mills, shoe factories, meat packing establishments, and coal mines. In the steel industry, where activity had shown none of the usual seasonal increase in August, operations expanded considerably dur ing September and the first three weeks of Oc tober to about 20 per cent of capacity. Daily average output of automobiles and lumber in September showed little change from recent low levels. Factory employment increased from 58.8 per cent of the 1923-1925 average in August to 60.3 per cent in September, according to the Board's seasonally adjusted index. Considerable in creases were reported in the cotton, woolen, silk, hosiery, and clothing industries, and smaller increases at car building shops, foun dries, cement mills, and furniture factories. In the automobile tire and electrical machinery in dustries, employment declined. During the three months ending with Sep tember, value of building contracts awarded, as reported by the F. W . Dodge Corporation, was about the same as in the preceding three months, although awards are usually smaller in the third quarter. In the first half of October the daily average of contracts declined somewhat. Distribution. Volume of freight car loadings increased by considerably more than the usual M O N T H L Y REVIEW OF BUSINESS CONDITIONS 80 seasonal amount in September, reflecting chiefly larger shipments of coal and miscellaneous freight. Department store sales increased from the low level of August by somewhat more than the usual seasonal percentage. Wholesale Prices. Wholesale commodity prices, as measured by the monthly index of the Bureau of Labor Statistics, showed little change PER CENT October, 1932 monetary gold, from an unseasonal return flow of currency, and from issues of additional na tional bank notes. Member bank indebtedness to the reserve banks declined by more than $100,000,000 from September 7 to October 19, and their reserve balances increased by $180,000,000. During September and the first two weeks of PER CENT INDUSTRIAL PRODUCTION RAILROAD FREIGHT-CAR LOADINGS Index numbers of industrial production adjusted for seasonal variations (1923-1925 average=100). Indexes of daily average number of cars loaded; adjusted for sea sonal variations (1923-1925 average «100). from August to September. During August and early September there was a general advance in prices followed by a decline which continued through the first half of October, when the average was 2 per cent below the high point in early September and 1 per cent above the low point of early summer. Substantial decreases occurred after the beginning of September in October reporting member banks in leading cities showed a further growth in investment holdings, largely of United States Government securities, but to some extent of other invest ments. Loans of reporting banks declined further in September. In the early part of October, loans at banks in New York City showed an in crease. There was considerable growth in G o v - PER CENT RESERVE BANK CREDIT AND PRINCIPAL FACTORS IN CHANGES Monthly averages of daily figures. Latest figures are averages of first 22 days in October. federal Federal Reserve Board’s index of factory employment, with adjust ment for seasonal variations (1923-1925 average = 100). the prices of many domestic agricultural com modities, including cotton, grains, and live stock, and also in prices of gasoline, non-ferrous metals, and imported raw materials; while prices of wool, worsted yarns, coal, and lumber in creased somewhat during this period. Bank Credit. During September and the first three weeks of October there were further addi tions to the reserve funds of member banks, arising from increases in the country’s stock of ernment deposits and in bankers’ balances dur ing the period; time deposits also increased. Money rates in the open market declined to lower levels during the first half of October, the rate on prime commercial paper being reduced from a range of 2-2J4 per cent to a range of 1^4-2 per cent and the rate on 90 day bankers’ acceptances from ¿4 Per cent to per cent. Rates for call loans on stock exchange collateral declined from 2 per cent to 1 per cent.
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