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MONTHLY REVIEW OF B U S IN E S S C O N D IT IO N S ISAAC B. NEW TO N , Chairman of the Board and Federal Reserve Agent Federal Reserve Bank of San Francisco Vol. X I San Francisco, California, September 20,1927 No. 9 S U M M A R Y O F N A T IO N A L C O N D IT IO N S Prepared by the Federal Reserve Board Industrial production increased in August, reflecting growth in output of mines. Distribu tion of commodities, both atwholesale and at re tail, increased by more than the usual seasonal amount. The general level of wholesale com modity prices rose about one per cent, owing chiefly to advances in prices of farm products. Production, Production of anthracite and bituminous coal, which showed a considerable decline earlier in the season, increased sharply in August and the early weeks of September, and this rise was reflected in an advance in the Federal Reserve Board's index of mineral out put from 98 per cent of the 1923-1925 average in July to 106 per cent in August. The index of manufactures as a whole showed practically no change for the month. The iron and steel in dustry continued during August and Septem ber with little change in demand or in produc tion. The output of newsprint, lumber, and cement showed only customary seasonal changes in August. Consumption of cotton re mained unusually large for this season of the year, and there was an increase in the produc tion of automobiles, which, however, remained below the output of August of last year. Out put of shoes and rubber tires increased from P E R C EN T July to August by less than the customary sea sonal amount. Factory employment was in practically the same volume in August as in July, and both employment and production were smaller than a year ago. The volume of building contracts awarded in August was smaller than in August, 1926, which was a month of unusually large awards. The largest decreases, as compared with last year, were in the Boston, New York, and Chicago Federal reserve districts. In the first half of Septem ber, awards were in practically the same volume as in the corresponding period of last year. The Department of Agriculture’s esti mate of corn production on the basis of Sep tember 1st condition was 2,457,000,000 bushels, compared with 2,647,000,000 bushels harvested in 1926. The total yield of wheat is expected to be somewhat larger than a year ago. The fore cast of the yield of cotton was 12,692,000 bales, representing a reduction of 800,000 bales from the August estimate and of over 5,000,000 bales from last year's crop. Trade. Distribution of merchandise at whole sale and retail increased more than is usual in August, and sales were generally larger than in August of last year. Sales of wholesale firms P E R C EN T i PAY ✓ " v - 'N A jf ^7*5^ - « ' l ' \ M1NEF*ALS — 5 9 2 4 1925 1926 v ^ 1 ¥ V E l V I P L O Y M E N “r MAINUFACTURI ES ¡9 2 3 R O LLS w ✓ \ 1927 ............... . 1923 1924 1925 1926 1927 P R O D U C T IO N O F M A N U F A C T U R E S A N D M IN E R A L S In d ex num bers of production of m anufactures and m inerals, a d justed for seasonal variations (1923-1925 average = 100). Latest figures, A u g u s t, m anufactures, 106; m inerals, 106. FACTORY EM PLOYM ENT AN D PAYROLLS Federal R eserv e B o a rd 's indexes of factory em ploym ent and payrolls (1919 m onthly average= 1 0 0 ). Latest figures, A u gust, em ploym ent, 91.2; payrolls, 104.4. 66 M O N T H L Y REVIEW OF BUSINESS CONDITIONS in most leading lines were larger than a year ago. Inventories of department stores were smaller in dollar value than a year ago. Stocks carried by wholesale firms continued in August generally smaller than last year. Freight carloadings of nearly all types of commodities in creased considerably in August and the early part of September but, with the exception of grains and miscellaneous products, loadings for PER S e p te m b e r , 1927 in the prices of some iron and steel products. Bank Credit. Between August 17th and September 21st, total loans and investments of member banks in leading cities increased by 400 million dollars to the largest figure on record. There were increases in loans on securities and in investments as well as the usual seasonal growth in loans for agricultural and commercial purposes. B I L L I O N S OF D O L L A R S CENT W H O L E S A L E P R IC E S In d e x o f U n ited States Bureau o f L a b o r Statistics (1913 prices =1 0 0 ). Latest figures, A u gu st, all com m od ities, 146.6; non-agricultural com m od ities, 144.5; agricultural com m od ities, 148.1. M E M B E R B A N K C R E D IT M o n th ly averages o f w e e k ly figures for ban ks in 101 leading cities. Latest figures are averages for first three w e e k ly report dates in S eptem ber. all groups continued in smaller volume than in the same period of last year. Prices. W holesale com m odity prices, as measured by the index of the Bureau of Labor Statistics, increased from 145 in July to 147 in August. There were large increases in the prices of farm products and of clothing ma terials, while most of the other groups showed only slight changes. The price of raw cotton advanced from \7 y2 cents a pound on August 1st to over 23 cents on September 8th, but since that date has declined by about three cents a pound. Prices of cotton goods, cattle, hogs and sugar also increased in August and the first three weeks of September, while those of grains declined. Recently there have been reductions The volume of reserve bank credit increased during the month ending September 21st, re flecting seasonal growth in demand for currency and exports of gold. The increase was entirely in holdings of acceptances and United States securities, as there was little change in discounts for member banks. In the open money mar kets, rates on security loans increased slightly during September, while rates on commercial paper and 90-day bankers’ acceptances re mained unchanged at the lowest level of the year. Discount rates at the Federal Reserve Banks of Philadelphia, Chicago, San Francisco, and Minneapolis were reduced during Septem ber from 4 to 3 V2 per cent, the rate prevailing in the other eight districts. TW ELFTH F E D E R A L R E S E R V E D IS T R IC T C O N D IT IO N S In the Tw elfth Federal Reserve District, changes in volum e of production and trade dur ing August, 1927, were largely seasonal in character. T otal volume of industrial output approximated that of a }^ear ago, and volume of distribution was greater than in August, 1926. In view of the fact that there was one more business day during August, 1927, than during August, 1926, industrial output, when figured on a daily average basis, was probably smaller and average daily volume of trade only slightly larger in A ugust of this year than in August a year ago. Demand for credit at mem ber banks did not reveal the usual seasonal in crease during August and early September and discounts at the Federal Reserve Bank of San Francisco declined to the lowest point since February, 1925. On September 10, 1927, the rediscount rate of the Federal Reserve Bank of San Francisco was reduced from 4 to 3y2 per cent for all classes and maturities of paper. The 4 per cent rate had been in effect since November 23, 1925. A late agricultural season has contributed to business hesitancy during the past few months, but conditions during August were favorable S e p te m b e r , 1927 for agricultural operations, and harvesting of the district’s crops has progressed rapidly. Yields are generally larger than a year ago. A l though quality of some crops is reported to be below that of last year, price returns to growers are reported to be generally satisfactory. Volum e of employment and total wages paid in the district’s chief industries were smaller during August, 1927, than during August, 1926. Value of building permits issued and daily average output of lumber were approximately the same as in August a year ago. Flour mill ing was less active than in August, 1926. Daily average railway freight carloadings and retail sales were larger than last year, but sales at wholesale, although larger than in July, 1927, were smaller than in August, 1926. This bank’s seasonally adjusted index of daily average bank debits in 20 principal cities of the district declined from 127 in July, 1927 (1923-1925 average= 100), to 123 in August, 1927. A year ago the index stood at 121. B A N K D E B I T S * —T w e lfth D istrict A u gu st, July, June, 1927 1927 1927 127 W ith S e a son a l A d ju s t m e n t .. . 123 126 W it h o u t S e a so n a l A d ju s t m e n t 111 120 121 A u g u st, 1926 121 110 July, 1926 122 117 * D a ily a v era g e, 1 9 2 3 -1 9 2 5 = 1 0 0 . INDEX 67 FEDERAL RESERVE AG EN T AT SAN FRANCISCO NUMBER and barley, particularly in Oregon, W ashing ton, and Idaho, have been raised as harvest re ports have come in. Milling quality of wheat is reported to be below that of last year. As a result of active demand and favorable prices, a heavy movement of wheat is under way in the Pacific Northwest. Exports of wheat from Pa cific Northwest ports were considerably heavier during August, 1927, than during August, 1926. Yields of field crops, with the exception of cotton, generally approximate or are greater than those of a year ago. A 25 per cent decrease in acreage planted to cotton in this district and a lower yield per acre are reflected in a 40 per cent decrease in estimated production. P R O D U C T I O N * — G rain and F ield C r o p s Prelim inary Estim ate W h e a t (b u s h e ls ) Sept. 1,1927 T w e lft h D is t r ic t ........................ 133,107 U n ite d S tates ............................... 860,892 B a rle y (b u s h e ls ) T w e lft h D is t r ic t ........................ 40,459 U n ite d S t a t e s ............................... 259,406 R ic e (b u s h e ls ) T w e lft h D is t r ic t f ...................... 9,104 U n ite d S t a t e s ............................... 39,200 B e a n s (b u s h e ls ) T w e lft h D is tr ic t$ ...................... 6,266 U n ite d S tates ............................... 17,300 C o tto n (b a le s ) T w e lft h D is t r ic t § ............................. 180 U n ite d S tates ............................... 12,692 P o t a t o e s (b u s h e ls ) T w e lfth D is t r ic t ........................ 51,405 U n ite d S tates ............................... 400,000 S u g a r B e e ts ( t o n s ) T w e lfth District|| ...................... 1,267 U n ite d S t a t e s ................................ 6,810 H o p s( poun ds) T w e lfth D is tr ic t ........................ 31,757 A ctu al 1926 103,368 832,809 F iv e -Y e a r (1922-1926) A v era ge 102,989 807,731 43,053 188,340 40,609 192,707 7,986 41,006 6,084 36,387 6,739 17,138 5,593 16,140 253 17,977 174 13,649 41,506 356,123 36,661 394,182 892 7,223 1,642 6,942 34,838 26,237 *000 o m itte d . fC a lifo r n ia . ^ C a lifo rn ia and I d a h o . § A r iz o n a and C a lifo rn ia . ||C a lifo rn ia , I d a h o , and U ta h . 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 . The 1927 production of deciduous fruit in California, as indicated by September 1st crop reports, will be slightly larger than total pro duction in 1926. P R O D U C T IO N O F F R U IT S A N D N U T S IN C A L IF O R N IA In d ex for 20 principal cities, Ph oenix, A r iz o n a , not includ ed (d a ily averages, 1923-1925 average = 100). Latest figures, A u gu st, with adjustm ent, 123; w ithout adjustm ent, 111. *Based upon average month to month increase during- the years 1919 to 1926 inclusive. Agriculture W eather conditions in the district during August and early September have been favor able for agricultural operations. The cold weather and heavy rains of last spring delayed the maturity of many crops from one to three weeks, but harvesting of grain and early de ciduous fruit crops has now passed its peak, and harvesting of field crops, grapes, and apples is under way. Livestock and ranges are gener ally in excellent condition. Early harvest returns of the grain crops pro duced in the district indicate that total yields will be slightly larger than those forecast earlier in the season and will exceed those of a year ago. Estimates of production of wheat A lm o n d s ............................ A p r ic o t s ............................. F ig s ..................................... G ra p e s ............................... W in e ............................... T a b le .............................. R a is in ............................. O liv e s .................................. P e a ch e s ............................. P ea rs ................................... P lu m s .................................. P ru n e s ............................... W a ln u ts ............................. F orecast Sept. 1,1927 (tons) 12,700 187,000 2 ,3 Í ó’ 6Ó6 455,000 488,000 1,373,000 497,000 1 86,000 57,000 211,000 42,000 A ctual 1926 (tons) 15,750 176,000 11,350 2,129,000 414 ,0 0 0 t 39 8 ,0 0 0 t 1,317,000 9,800 541,000 207,000 71,000 150,000 15,000 F iv e -Y e a r (1922-1926) A v era ge (tons) 10,150 164,600 9,990 1,859,400 407,400 314,400 1,137,600 11,460 411,000 160,800 55,600 135,000 25,100 f i t is e stim a te d that 32,000 to n s o f ta b le g ra p e s and 20,000 to n s o f w in e g ra p e s (fr e s h b a s is ) w ere d ried and in c lu d e d in a b o v e fig u re s. S o u r c e : C a lifo rn ia C o o p e r a tiv e C r o p R e p o r t in g S e r v ic e . Shipments of deciduous fruits from Califor nia have reflected the late season but, if allow ance be made for this factor, have gone forward in large volume. Unit returns for grapes shipped thus far this season have been slightly higher than in 1926 when this fruit reached Eastern markets before the usual autumn de- S e p te m b e r , 1927 M O N T H L Y REVIEW OF BUSINESS CONDITIONS 68 mand had developed. Figures of fruit ship ments from California during the 1927 and 1926 seasons to September 11th follow : D E C ID U O U S F R U IT S H I P M E N T S -C A L IF O R N I A (carloads) T otal this T otal last season to season to Sept. 11th Sept. 11th A p r ic o t s .................................................................... 464 262 C h erries .................................................................... 579 741 4,306 1,582 P e a ch e s .................................................... ................ P lu m s .......................................................... .............. 4,083 5,213 P e a rs .......................................................................... 7,039 9,057 G ra p es ........................................................................ 12,827 19,052 M ix e d ......................................................................... 140 260 T o t a l A ll V a r i e t i e s ......................................... S ou rce: 29,438 36,167 C a lifo rn ia F r u it N e w s . Shipments of oranges and lemons from Cali fornia during August, 1927, totaled 4,058 and 838 carloads, respectively, as compared with 3,313 and 1,367 cars shipped a year ago. The commercial production of apples in the Pacific Northwest and California is approxi mately 20 per cent less than a year ago. Prices received for Eastern shipments of Pacific Northwestern apples are higher than those re ceived last year and reflect to some degree a decreased national production. C O M M E R C IA L P R O D U C T IO N O F A P P L E S T w elfth D istrict and U n ited States F iv e -Y e a r C a lifo rn ia ......................................... I d a h o ................................................... O r e g o n ............................................... W a s h in g t o n .................................... T w e lft h D is t r ic t ........................... U n ite d S t a t e s .................................. F o re ca st A ctu a l (1922-1926) Sept. 1,1927 1926 A v era ge (000 bushels) (000 bushels) (000 bushels) 4,647 6,144 4,881 4,206 2,775 3,615 3,216 5,100 4,502 20,622 25,650 24,261 32,691 72,594 39,669 118,233 37,259 111,130 Physical conditions during the past summer have generally benefited livestock and ranges throughout the district and it is reported that stock will go to the fall markets and ranges in excellent flesh. Further evidence of improved financial conditions among stockmen is indi cated by the continued demand for breeding animals. Industry Total volume of industrial output expanded seasonally during August, 1927, and approxi mated that of August, 1926. There was one more business day during August, this year, than during August a year ago, however, so that daily average output was probably smaller than last year. Volum e of employment was less and payrolls were smaller during August, 1927, than during August, 1926. Seasonal ex pansion in industrial and agricultural activity has resulted in a diminution of unemployment, as compared with the early summer, although a surplus of laborers is still generally reported. Value of building permits issued in principal cities of this district during August, 1927, showed a greater than seasonal increase over the low figure for July, 1927, and approximated the value of permits issued during August, 1926, according to figures published by S. W . Straus and Company. Value of permits granted in 88 cities in the Twelfth Federal Reserve D is trict, at $37,750,272, showed an increase of $7,011,604, or 22.8 per cent, above the low level recorded in July and a decrease of $380,118, or 1.0 per cent, from August, 1926. Data for 20 principal cities of the district, among which were those which showed the large decreases in June and July, showed a 27 per cent July to August, 1927, increase in value of permits granted compared with an average seasonal increase amounting to about 12 per cent. Com parison of average building costs per permit reveal a continued prevalence of large types of buildings. The relative proportion of permits issued for large commercial and semi-commer cial structures has decreased since the begin ning of 1927, however. (A) Employment— -C aliforni a----------s r -----O re g o n - ----------- N o . of N o . of N o . ^—E m ploy ees — N o. E m ployees —<> of A u g ., A u g ., of A u g ., A u g ., 1927 1926 Firm s 1927 Industries ]Firm s 1926 A ll In d u s t r ie s ........... 776 165,557 170,989 160 30.162 32,512 (-7 .2 ) (-3 .2 ) S to n e , C la y and 7,891 258 285 5 52 7,275 G lass P r o d u c t s . ( — 9 .5 ) (8 .5 ) L u m b e r and W o o d 18,267 58 17,513 28,146 M a n u fa ctu re s . . 123 28,568 (1 .5 ) ( — 4 .1 ) 2,621 11 2,248 2,053 2,677 19 T e x tile s ................... (9 .5 ) (2 .1 ) C lo th in g , M illin e ry r and L a u n d e r in g . F o o d s , B e v e ra g e s an d T o b a c c o . . . W a te r , L ig h t and P o w e r ................. 61 7,542 (3 .2 ) 7,306 170 50,608 ( — 0 .6 ) 50,916 7,725 16.0) 9,194 5 ( 8* 44 431 (0 .7 ) 428 3,617 (— 3 0 .9 ) 5,234 58,424 63,305 ( — 7 .7 ) 6,245 2,122 34 6,095 2,226 M is c e lla n e o u s . . . . (— 2 .4 ) ( — 4 .7 ) --------" L a u n d e r in g o n ly , f l n c l u d e s th e fo llo w in g in d u s t r ie s : m etals, m a c h in e r y an d c o n v e y a n c e s ; lea th er and r u b b e r g o o d s ; c h e m ic a ls , o ils an d p a i n t s ; p r in tin g an d p a p e r g o o d s . F ig u r e s in p a ren th eses in d ic a te p e r c e n ta g e c h a n g e fr o m A u g u s t, 1926. O th e r I n d u s t r ie s !. 333 13 A u gu st J u ly . . . Ju n e . . M ay . . B U I L D I N G P E R M I T S I N 20 C I T I E S Per cent increase or decrease (— ) M o n th s in 1927 com pared M on th in 1927 with sam e m onths in com pared with -1 9 2 6 p recedin g M on th ly Y e a r-to -d a te month N o. V a lu e N o. V a lu e N o. V a lu e .9 — 0.2 — 8.3 — 9.7 19.5 26.8 .9 — 27.9 — 9.2 — 10.9 — 7.5 — 17.6 .2 — 23.5 — 8.9 — 8.1 — 3.3 — 21.2 .4 22.0 — 9.4 — 4.6 — 6.3 5.0 'ermitsB e r k e le y ........... B o is e .................. F r e s n o ............... L o n g B e a ch . . L o s A n g e le s . . O a k la n d ............ O g d e n ................ P a sa d e n a .......... P h o e n ix ............ P o r tla n d ........... R e n o .................... S a c r a m e n to . . . Salt L a k e C ity . S an D ie g o S an F r a n c is c o S an J o s e .......... Seattle ................ S p o k a n e ............ S tock ton .......... T a com a ............ D is t r ic t A u gu st, 1927 N o. V a lu e 289 $ 392,048 68 52,000 78 233,736 412 938,950 3,391 11,790,916 714 2,157,881 25 56,200 235 578,925 94 481,000 1,700,045 1,073 16 44,405 221 486,813 89 425,165 723 1,293,083 848 3,609,611 78 379,560 908 3,400,340 216 435,142 100 297 ,028 288 204,485 9,866 $28,957,333 A u gu st, 1926 N o. V a lu e 305 586,206 $ 54 38,975 60 89,305 282 459,166 2,906 8,826,108 985 2,665,900 37 208,100 232 917,792 106 222,162 1,325 3,169,865 27 109,050 217 662,286 93 741,595 749 1,384,439 862 4,163,510 139 355,825 1,026 2,784,660 219 452,345 76 594,150 355 594,102 10,055 $29,025,541 S e p te m b e r , 1927 Prices of building materials continued down ward during August. The United States Bureau of Labor Statistics’ index declined from 162.4 (1913 prices=100) for July, 1927, to 160.8 for August, 1927. One year ago this index stood at 171.8. In August, 1927, for the fourth con secutive month, the Aberthaw index of indus trial building costs, including both labor and materials, stood at 192 (1914 costs= 1 0 0). This index stood at 197 on September 1, 1926. Lumbering operations showed a seasonal ex pansion during August, 1927, according to data reported by mills to four associations in this district. Continual shifting in both com posi tion and number of lumber mills reporting to the associations makes the available statistics unreliable for comparative purposes. Such figures as are available reveal increased output, shipments, and orders received, during August, 1927, as compared with August a year ago. That part of the increase which cannot be ac counted for by the larger number of mills (193) reporting this year as compared with last year (184) may be accounted for by the presence of one extra business day in August, 1927, as compared with August, 1926. Number of workers on payrolls of and total weekly wages paid by mills in California and Oregon were smaller during August, 1927, than during August a year ago. LU M BER* T w elfth D istrict A u g ., 1927 (board feet) P roduction ..................................... Shipments ....................................... Orders .............................................. Unfilled Orders t ........................ N o. of Mills R e p o r t i n g ! ........... 895,355 818,775 804,875 465,143 193 July. 1927 (board feet) A u g ., 1926 (board feet) 740,674 697,018 703,253 515,568 182 826,845 801,024 757,592 545,068 184 *A s reported by four associations, 000 om itted except in case o f number of mills reporting. tR ep orted by three associations. The figures are not strictly com parable with other figures appearing in the table. tA verage. S o u r c e : N ational Lum ber M anufacturers A ssociation. Average daily production of petroleum in California was further reduced during August, 1927, but continued larger than a year ago. In dicated average daily consumption of crude oil increased 6.1 per cent to 672,899 barrels dur ing August, 1927, as compared with July, 1927, and, with the exception of February, 1927, was larger than in any other month since July, 1926. The downward trend in California surface holdings of crude oil continued during August, 1927, and by August 31st, stored stocks had registered a net decline of 2,409,707 barrels during 1927. P E T R O L E U M — C aliforn ia Indicated A v e ra ge Stored A v era ge D a ily S tock s at D aily C on su m ption End o f P rodu ction (Shipm ents) M o n th (barrels) (barrels) (barrels) A u g., 1 9 2 7 .... 621,907 Tuly, 1 9 2 7 .... 623,194 A ug., 1 9 2 6 .... 605,325 672,899 634,157 647,417 117,132,849 118,713,590 120,605,895 <— N e w W e l ls —* D aily P rod u ction (barrels) 75 42,286 N u m ber O pen ed 70 55 31,480 18,067 S o u r c e : A m erican Petroleum Institute. Figures of national non-ferrous metals pro duction, together with a guide to the propor 69 FEDERAL RESERVE AG EN T A T SAN FRANCISCO tionate importance of this district in such pro duction, are presented in the follow ing table: N O N -F E R R O U S M E T A L S N ational P rodu ction P rodu ced in A u g ., July, A u g ., 12th D i st.* C o p p e r (s h o r t t o n s ) (m in e 1927 1927 1926 in 1926 p r o d u c t io n ) .................... 67,138 60,545 72,221 64.1 L e a d (s h o r t to n s ) (c r u d e ) t 56,423 58,308 58,071 43.5 Z in c (s h o r t t o n s ) ( s l a b ) . 49,012 47,627 51,761 13.3 S ilve r ( o z .) (c o m m e r c ia l bars) ..................................5 ,036,000 5,067,000 5,073,000 69.7 ^ In c lu d in g all o f A r iz o n a , the fiv e s o u th e a s te rn c o u n tie s o f w h ich are in th e E le v e n th F e d e ra l R e s e r v e D is t r ic t , fIn clu d e s fig u re s fo r M e x ic o . Flour milling activity increased by less than the usual seasonal amount during August and output of flour approximated that of August, 1926, according to data supplied this bank by 14 large milling factors in this district. August, 1927, flour output, however, was 5 per cent be low the five-year (1922-1926) average output for that month. Stocks of flour held by those factors increased slightly during the month and were larger than average August 31st’ holdings during the preceding five years. They were smaller than at the close of August, 1926. U n usually active export demand for wheat tended to prevent seasonal accumulation of wheat at mills, and millers’ stocks of wheat declined during August, contrary to the usual seasonal movement. On August 31, 1927, they were nearly 25 per cent smaller than the amount of stocks on hand at the end of August, 1926, but were slightly larger than the five-year (19221926) average holdings for that date. F L O U R M IL L IN G T w elfth D istrict O u tp u t ( b b l s .) .. . A u g ., 1927 419,310 July, 1927 387,884 A u g ., 1926 420,516 F iv e -Y e a r A v era ge A u g., 1922-1926 443,039 536,380 2,440,349 380,757 1,813,249 Stocks* F lo u r ( b b l s . ) . . W heat ( b u .)... 415,484 1,843,096 401,507 1,867,480 * A t e n d o f m o n th . Distribution and Trade The volume of distribution and trade in creased during the month of August by more than the usual seasonal amount and was larger than during August, 1926. A large part of the increase over a year ago may be accounted for by the presence of one more business day dur ing August, 1927, than during August, 1926, and trade when figured on a daily average basis was only slightly greater in volume than last year. Daily average railway freight carloadings were 2 per cent larger during August, 1927, than during August, 1926. Heavier shipments of grain and grain products from the Pacific Northwest, and increased shipments of forest products, merchandise, and miscellaneous com modities other than fruit from both California and the Pacific Northwest were chiefly respon sible for the larger carloadings as compared with last year. Reflecting the later agricultural season this year, shipments of fruit and perish ables were considerably smaller in volume dur ing August, 1927, than during August, 1926. 70 Sales at retail increased more than season ally during August, 1927, and were larger in value than during August, 1926. Reports from 128 firms in seven lines of trade showed in creases of 27.0 per cent over July, 1927, and 4.6 per cent over August, 1926. The increase for both the month and year was the result, chiefly, of increased department store sales in Los Angeles and Southern California. Depart ment stores for the district as a whole showed increases of 27.9 per cent and 6.3 per cent, respectively, in value of sales over July, 1927, and August, 1926. Value of sales of 53 furni ture stores was 1.5 per cent smaller than dur ing the same month a year ago. W hen figured on a daily average basis, retail sales increased by less than one per cent during August, 1927, as compared with August, 1926. Stocks on re tailers’ shelves increased 2.0 per cent during August as compared with a usual seasonal in crease of about 4 per cent, and were 2.2 per cent larger than at the close of August a year ago. --------- N E T S A L E S * ---------- * -S T O C K S * -^ January 1 to A u g ., 1927, A u g. 31,1927, com pared com pared with with sam e period A u g .,1926 in 1926 6.3 Departm ent Stores D ry Goods .......... 10.5 Furniture ............... 1.5 M en’ s A p p a r e l .........— 10.1 ( M en ’s and W o m e n ’s A pparel .................. 7.9 Shoes ........................... — 2.9 W o m e n ’s A pparel . . — 2.5 A ll R eporting Stores ..................... 4.6 ( 43) ( 6) ( 53) 24) 3.1 (37) 11.9 ( 5) — 0.8 (31) ( 10) ( 24) ( 9) 1.3 (10) 5.0 ( 5) 3.0 ( 9) (128) 2.7 (97) A u g ., 1927, com pared with A u g ., 1926 1.4 (37) ( 4) 1.2 (25) 6.8 2.2 (81) Sales at wholesale, according to this bank’s index of sales of 161 firms in eleven lines of trade, increased by more than the usual sea sonal amount during August, 1927, but were 1.6 per cent smaller than in August, 1926. The index adjusted for seasonal variation advanced from 91 in July, 1927 (1923-1925 monthly aver(C) D E P A R T M E N T S T O R E S A L E S — In d ex N u m bers (1923-1925 daily average= 100) San Salt Spo L ake O a k F ran' L os C ity Seattle kane c is c o A n g e le s land (4) f (5) t (5 )t (5 )t (3 )t (5) t W ith out Seasonal A d justm ent 1927. . . 1927.. . 1927. . . 1927. . . 1927.. . 192 7 .. . 1927.. . 1927.. . 1926. . . 118 96 102 I ll 121 116 105 114 Ill 107 93 104 110 118 103 96 99 106 W ith Seasonal A d justm ent A u g., July, June, M ay, A pril, M ar., F eb., Jan., A u g., 1927. . . 1 92 7 .. . 1927. . . 1 92 7 .. . 192 7 .. . 192 7 .. . 1 92 7 .. . 192 7 .. . 1926. . . 119 109 114 117 128 120 116 118 112 108 113 117 119 127 116 118 119 112 103 87 94 112 111 98 91 88 104 111 111 116 120 103 102 105 112 117 83 86 98 110 97 85 80 80 80 108 107 107 97 102 98 96 101 104 94 90 102 104 102 ÍN D E X N U M B E R 130 120 90 91 92 92 100 90 84 77 95 87 80 72 98 103 104 107 105 105 91 114 107 100 102 103 100 108 104 104 102 95 105 A 110 100 90 80 I a A >r » / W /> i£ i V ./V *» 4 i i — D E P A R T M E N T S T O R E S A L E S 70 S A L E S 60 AT W H O L E S A L E v V ---------------- ------------------------------------------------ ------------------------ --------------- w A A 1924 1923 1925 1926 1927 T R A D E A C T I V I T Y -T W E L F T H D IS T R IC T Seasonally adjusted index num bers o f sales o f 28 departm ent stores and about 170 w holesale firms, (1923-1925 a v e ra g e = 100). Latest figures, A u gust, departm ent stores, 112; w holesale firms, 99. 1927, than during August, 1926. The decrease was greater than the decrease in the wholesale price level over the year period so that activity in trade at wholesale was probably at lower levels during August, 1927, than during A u gust, 1926. W H O L E S A L E T R A D E — T w e lfth D istrict In d ex N u m bers o f Sales (1923-1925 monthly average= 100) N o . of 1927 Firm s A u gu st July June A gricultural Im plem ents . .. ., 15 13 14 6 D rugs 23 9 15 E lectrical Supplies F u rn itu r e ................. Groceries ............... 21 17 6 22 Shoes ............................... Paper and Stationery A ll Lines, A djusted* . . . 161 161 173 97 168 101 114 100 101 92 96 144 105 105 99 215 92 142 100 80 84 70 89 87 85 9393 91 181 94 156 103 80 101 101 93 101 94 92 104 98 1926 A u gu st 117 102 179 94 115 108 100 97 98 136 112 107 101 *F o r seasonal variation. Prices The slight rise in wholesale prices recorded during July was accelerated during August, and the United States Bureau of Labor Statis- D is trict A u g., 1927 (28) t .$ 107 92 99 110 113 93 95 98 104 112 111 112 113 120 111 109 111 110 fF igu res in parentheses indicate number o f stores. One store included in D istrict figures :not included in cities shown above. age = 1 0 0 ) to 99 in August, 1927. It stood at 101 in August, 1926. W hen considered on a daily average basis, sales at wholesale were 5.4 per cent smaller in value during August, 19.8 ( 8) ^Percentage increase or decrease (— ). Figures in parentheses indicate num ber o f stores reporting. Figures of identical departments of departm ent stores reporting such figures separately included in sales com parisons of m en’s apparel and shoe stores, A ugu st, 1927, with A ugust, 1926. A u g., July, June, M ay, A pril, M ar,, Feb., Jan., A u g., S e p te m b e r , 1927 M O N T H L Y REVIEW OF BUSINESS CONDITIONS 20,802 13,704 37,836 L o n g Beach .. 45,002 L os A ngeles . . . 835,565 209,721 16,259 34,601 P hoen ix ........... 22,073 P ortland ......... . 171,361 9,836 Sacram ento . . . 42,386 63,606 Salt Lake C ity. San D iego 55,929 San F rancisco . . 1,124,286 26,677 231,072 Seattle ............. 55,040 28,358 43,346 10,768 District .......... $3,098,228 *000 omitted. A u g ., 1926 $ 17,846 13,407 33.695 43,786 817,286 153,313 21,102 32,306 21,889 193,043 9,167 30,077 65,059 58,761 983,851 24,421 214,752 51,602 24,349 43,818 12,180 $2,865,710 1927 $ 169,435 104,593 293,302 396,378 7,414,917 1,759,304 133,917 329,886 215,256 1,320,080 73,900 290,851 545,325 493,759 9,515,526 204,838 1,673,894 434,088 221,686 359,463 94,597 $26,044,995 1926 $ 153,188 103,812 276,737 407,514 6,959,992 1,347,883 156,542 300,801 201,877 1,431,000 72,030 253,340 558,729 518,967 8,502,692 203,535 1,680,332 442,708 212,372 367,792 101,244 $24,253,087 S e p te m b e r , 1927 71 FEDERAL RESERVE AG EN T AT SAN FRANCISCO tics’ index of 404 commodities advanced from 144.6 (1913 prices=100) in July, 1927, to 146.6 in August, 1927, the highest point reached by this index since January, 1927. The index was but 1.7 per cent below the figure for August, 1926 (149.2). Advances were recorded by group indexes for farm products, foods, clothing, metals, house furnishings, and miscellaneous commodities. Group indexes for fuel and light, building materials, and chemicals and drugs continued to decline. Prices of farm products advanced more rapidly than did prices of non-agricultural products during the month. The United States Department of Agriculture’s index of prices paid to producers for farm products advanced two points during August to 132 (August, 1909July, 1914 prices= 1 0 0 ), while the United States Bureau of Labor Statistics’ index of non-agri cultural products was but fractionally higher. As a result, the ratio between these two, an index of the purchasing power of farm crops, rose from 86.3 (pre-war purchasing p o w e r = 100) in July, 1927, to 87.4 in August, 1927. A year ago the ratio stood at 83.0. Prices for cattle at Chicago advanced during August for the third consecutive month and averaged 24.5 per cent higher than in August, 1926. Quotations on hogs averaged fractionally higher during August than during July, but were 21.3 per cent lower than during August, 1926. Chicago sheep prices advanced 2.9 per cent during August as compared with July, but averaged 2.9 per cent less than during August a year ago. Lambs sold for less during August, 1927, than in either July, 1927, or August, 1926. W heat prices declined during the second half of August and first two weeks of September, and prices for September contract wheat at Chicago, at $1.25j^ to $1.28j4 per bushel on September 15th, were lower than in August, 1927, or September, 1926. On August 15, 1927, prices for this same grade of wheat at Chicago ranged from $1.40^4 to $1.43^6 per bushel, and on September 15, 1926, from $1.34j4 to $1.35^4 per bushel. Further advances in prices for cotton during August and early September culminated in a high point of 23.50 cents per pound for spot middling uplands cotton at New Orleans on September 8th. On September 19th this grade of cotton was quoted at 20.16 cents per pound, compared with 15.72 cents one year ago. W ool prices at Boston averaged 65.18 cents per pound in August as compared with 64.77 cents in July and 66.17 cents in August, 1926. Refined beet sugar in San Francisco was quoted at $5.90 per 100 pounds on September 2, 1927. This was 10 cents higher than a month earlier and compared with $5.70 per 100 pounds on September 2, 1926. Prices for non-ferrous metals averaged lower during August, 1927, than during either July, 1927, or August, 1926, with the exception of silver which averaged 0.9 per cent higher than in July, 1927. Softw ood lumber prices were somewhat higher in August than in July. Banking and Credit Condition statements of reporting member banks and of the Federal Reserve Bank of San Francisco during July, August, and early Sep tember have reflected the mid-year decline in business activity, the lateness of the agricul tural season, and the hesitation in business dur ing August. They reveal an ample available supply of funds for financing agriculture and business. Except for a temporary increase during the last half of August, the trend of commercial loans of reporting city member banks has been downward since last May. There is usually a seasonal expansion in commercial loans during August and September for financing crop movements. The agricultural season has been delayed, however, and business has been de clining for several months, so that the seasonal expansion in commercial loans has not yet ma terialized this year, and on September 14, 1927, these loans were 13 million dollars (1.4 per cent) smaller than during the first two weeks of August, 1927. The decline in commercial loans was only partially offset by increases in loans on securities, and total loans declined by (E) Commodity Prices— C om m od ity W h o le s a le P r ic e s (U . S. B u rea u o f L a b o r — 1913 p r i c e s = :1 0 0 ) ...................... P u r c h a s in g P o w e r o f F a rm P r o d u c t s ( U . S. D e p t, o f A g r i c u l t u r e ) * . . . . C a ttle (N a t iv e B e e f ) . .W e e k ly a v e r a g e p r ice at C h ic a g o .................................... L a m b s ............................... W e e k ly a v e r a g e p r ice at C h ic a g o ..................................... H o g s ..................................W e e k ly a v e ra g e p rice at C h ic a g o ...................................... W o o l ..................................A v e ra g e o f 98 q u o ta tio n s at B o s t o n ................................. A p p le s ............................... C a lifo rn ia G ra v e n ste in , w h o le s a le at San F r a n c is c o . P r u n e s ............................... S ize 4 0 /5 0 in 25-lb. b o x e s , f. o. b. C a lifo r n ia ............. R a is in s ............................... S eed less, b u lk , in 25-lb. b o x e s , f. o. b. C a lifo r n ia .. B u t t e r ................................92 s c o r e at San F r a n c i s c o ........................................ C o p p e r ................................E le c t r o ly t ic , m o n th ly a v e r a g e at N e w Y o r k . L e a d .................................... M o n t h ly a v e ra g e at N e w Y o r k ............................. L u m b e r ( S o f t w o o d ) . .W e e k ly In d e x , U n ite d S t a t e s f .................................... U nit 100 lbs. 100 lbs. 100 lbs. bu. lb. box box lb. lb. doz. lb. lb . lb. oz. Sept. 2,1927 146.6 87.4 $11.75$ 13.40$ 9.50$ 1 .3 3 ^ -1 .3 5 ^ 65.180 $ 2 .3 5 -3 .0 0 6 .2 5 -7 .5 0 . 0 5 ^ - . 0 6 r4 .0634 1.7 5 -1 .8 5 .46 12.9710 6.6810 54.7180 29.68 O n e M on th A g o 144.6 86.3 $11.65 13.65 9.20 1 .3 7 ^ -1 .3 8 5 4 64.770 $ 2 .1 0 -2 .7 5 6 .0 0 -7 .2 5 .0 7 3 4 -.0 7 3 4 .0634 N o t q u o te d .42 12.5320 6.3440 56.3600 29.40 O ne Y ear Ago 149.2 82.4 $10.00 14.25 11.65 1 .2 9 ^ -1 .3 0 ^ 66.170 $ 1 .0 0 -1 .2 5 4 .7 5 -5 .2 5 .0 7 ^ -.0 8 * 2.100 .44 14.1740 8.9080 62.3800 29.90 .075 *Ratio of farm prices (August, 1909-July, 1914 prices=:100) to wholesale prices of non-agricultural commodities (1910-1914 prices=: 100). tA s published by “ The Lumber Manufacturer and Dealer.” ^September 3, 1927. QRevised. 72 M O N T H L Y REVIEW of 5 million dollars or 0.4 per cent during the month. On September 14, 1927, total loans of reporting member banks were 15 million dol lars or 1.2 per cent smaller than on July 6, 1927, whereas ordinarily they are larger on the later date. Total deposits remained at a relatively constant level during August and early September, but during the week ended September 14th increased sharply to 1,739 mil lion dollars, an increase of 34 million dollars or 2.0 per cent over a month ago. M IL L IO N S OF D O LLA R S b u s in e s s S e p te m b e r , 1927 c o n d it io n s to 78 million dollars. This decline was due wholly to a marked decrease in volume of bills discounted, which declined during the second week of September from nearly 44 million dol lars to 17 million dollars. The decline in dis counts was the result, chiefly, of liquidation of borrowings on the part of city member banks. Volum e of total earning assets and bills dis counted on September 14th were at the lowest levels since July, 1918, and February, 1925, re spectively. Investment holdings (acceptances M IL L IO N S OF D O LLA R S R E S E R V E B A N K C R E D I T -T W E L F T H D IS T R IC T F igu res fo r Federal R e se rve B ank of San F ra n cisco , as o f last W e d n e s day o f each m onth. Latest figures, Septem ber 14th. The abundant supply of available funds en abled reporting member banks to increase their investment holdings and at the same time re duce their borrowings at the Federal Reserve Bank. Total investments of these member banks increased by 29 million dollars or 6 per cent during the four weeks ended September 14th and their borrowings from the Federal Reserve Bank of San Francisco, although in creasing slightly during August and early Sep tember, declined to 9 million dollars during the week ended September 14th, a figure more than 70 per cent below that reported on August 17, 1927, and smaller than at any other time since February, 1925. The sharp decrease in bor rowings from the Reserve Bank accompanied the sharp increase in deposits which was only partially offset by increased loans and invest ments of the reporting member banks. R E P O R T I N G M E M B E R B A N K S — T w elfth D istrict (in millions of dollars, percentage changes in parentheses) C o n dition Sept. 14, 1927 T o t a l L o a n s ........................... . . 1,262 930 C o m m e r c ia l L o a n s ............ . . 332 L o a n s on S e c u r itie s .......... . . 522 I n v e s tm e n ts ........................... . . T o t a l L o a n s a n d I n v e s tm e n ts 1,784 N e t D e m a n d D e p o s it s . . . . . 819 T im e D e p o s it s ...................... . . 919 B o r r o w in g s fr o m F e d e ra l 9 R e s e r v e B a n k ................. O n e M on th Ago ( + = increase. — 5 ( 0 .4 ) — 13 ( 1.4) + 8 ( 2 .4 ) + 29 ( 6 .0 ) + 2 4 ( 1.4 ) + 27 ( 3 .4 ) + 13 ( 1.4) — 21 (7 0 .1 ) O ne Y ear Ago — = decrease. ) - [-44 ( 3 .6 ) Hh 6 ( 0 .7 ) -J-3 7 (1 2 .7 ) - - 4 9 (1 0 .4 ) - - 9 2 ( 5 .4 ) H-2 5 ( 3 .2 ) - -8 4 (1 0 .0 ) - -3 3 (7 8 .2 ) Total earning assets (total bills and securi ties) of the Federal Reserve Bank of San Fran cisco fluctuated between 97 million dollars and 110 million dollars during August, but during the second week in September declined sharply M E M B E R B A N K C R E D IT —T W E L F T H D IS T R IC T Figures for about 65 m em ber banks in leading cities, as of last W ed n esd a y o f each m onth. Latest figures, Septem ber 14th. and United States government securities) in creased slightly during the four-week period ended September 14th, the result of purchases in the open market which took 5 million dol lars of United States government securities and acceptances off the San Francisco and New York City markets. A sharp increase in reserves amounting to 10 per cent during the four weeks ended Sep tember 14th more than offset increases of 2 per cent each in deposits and Federal reserve note circulation, and the primary reserve ratio* rose to 82.8, the highest figure reported since late August, 1924 (83.0). The ratio stood at 75.0 on August 31, 1927, and 76.9 on August 17, 1927. 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, percentage changes in parentheses) 78 17 46 14 294 183 t----------C h anges from ---------- \ O n e M onth O ne Y ear Ago Ago ( + = increase. — = decrease. ) — 44 (3 6 .3 ) — 19 (1 9 .4 ) — 24 (5 8 .4 ) — 34 (6 6 .0 ) + 2 ( 5 .2 ) + 3 ( 6.8 ) + 3 (2 7 .7 ) — 14 (4 9 .0 ) + 26 ( 9 .8 ) + 35 (1 3 .4 ) + 4 ( 2 .0 ) + 6 ( 3.6 ) 172 + C o n d itio n Sept. 14, 1927 T o t a l B ills and S e c u r itie s . B ills D i s c o u n t e d .................... U n ite d States S e c u r itie s . . B ills B o u g h t ........................... T o t a l R e s e r v e s ...................... . , T o t a l D e p o s it s ...................... F e d e ra l R e s e rv e N o te C ir c u la tio n ........................... . . 3 ( 2 .0 ) — 21 (1 0 .7 ) On September 10, 1927, the rediscount rate of the Federal Reserve Bank of San Francisco was reduced from 4 to ?>y2 per cent for all classes and maturities of paper. The 4 per cent rate had been in effect since November 23, 1925. *Ratio of total reserves to total deposits and Federal reserve notes in circulation.
@FedFRASER