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Rewieur Monthly FEDERAL RESERVE BANK OF SAN F R A N C ISC O S E P T E M B E R - O C T O B E R 1947 REVIEW OF BUSINESS CONDITIONS— TWELFTH DISTRICT e w m a r k e d c h a n g e s occurred in the general level of business activity in the Twelfth District during the summer and early autumn months. Increasing demand at generally rising prices has exerted steady pressure on the basic extractive industries, including agriculture, lum ber, petroleum, and metalliferous mining. The output of most crop and livestock products has been close to the average of recent years. Reported lumber output during the first eight months of the year exceeded the total pro duction in the first nine months of 1946, and the mills were steadily adding to their volume of orders under the stimulus of a high rate of construction activity and brisk export demand. The freight car shortage, however, has hampered some industrial operations, including coal min ing and lumber shipments. Crude oil production reached a level during midsummer very close to the maximum output at the height of the war effort ; District gasoline output in August actually exceeded the peak rates of the last few months of the war. General industrial production and employment have held at fairly steady levels except in the metal-working industries. Some retrenchment was reported in Califor nia aircraft plants, while in Washington aircraft employ ment expanded slightly. Continued shrinkage of ship repair and conversion work resulted in sharp drops in shipyard employment in both California and Washing ton. Material shortages have hampered operations in automobile assembly plants and in machinery and other metal-working establishments. The plywood, paper, and furniture industries have remained very active and the California apparel industry has recovered from the slump it experienced earlier in the year. Seasonal expansion in the District canning industry came somewhat later than last year but reached very high levels in August and Sep tember. Construction of most kinds was very active in the third quarter of 1947 and a large volume of new building construction is currently under way, especially in southern California. Employment in the motion pic ture industry declined in July and August to levels about 20 to 25 percent below those of the corresponding months of last year. In most other California nonmanufacturing industries employment was substantially higher in those months than a year ago. Commodity prices rose sharply from July to October to new high levels. Advancing prices for farm prod ucts in particular have carried agricultural income from F marketings to new peaks. Dried fruit prices, however, are down rather sharply from the highs reached early in the year. The Commodity Credit Corporation has initiated a purchase program which is intended to absorb a considerable part of the dried fruit output of the Dis trict, particularly of prunes and raisins. Little other price support activity is expected, however. Industrial wages and earnings have continued to advance, though less rapidly than last year, and the gap between cost of living and wage income continues to widen. The dollar volume of retail trade in the District re mains at a high level. The continuing influx of population into the metropolitan areas of the District probably con tributes somewhat to sustaining the current large volume of sales, though considerable changes are occurring in the composition of aggregate retail expenditure. The rela tively small increases in department store sales in recent months over the corresponding months of last year, taken in conjunction with the present higher price level, indicate a total physical volume below that of a year ago, par ticularly in soft goods. Purchases of consumers’ durable goods, however, such as automobiles, furniture, and major household appliances, are increasing with the growing availability of these products. Rapid expansion in bank loans Member bank loans in the Twelfth District increased about $400 million in the third quarter of this year, reach ing a total of $5 billion at the end of September. A marked upward trend has prevailed so far this year, except for some slackening in May and June, and the rate of in crease has shown successive gains in each month of the third quarter. The percent increase in September was the largest so far this year. Real estate and consumer loans continued to expand at a substantial rate. As compared with earlier months of this year, the expansion in commercial, industrial, and agricultural loans during the third quarter was especially marked. The volume of these loans had declined slightly in May and June, but the increase of about 4.5 percent in September was substantially larger than that for any other month this year. It was the first time this year that the monthly rate of increase in these loans had ex ceeded that for real estate loans. The expansion in all major categories of loans in the first three weeks of Octo ber, however, was below the September rate. 80 FEDERAL RESERVE BANK OF SAN FRANCISCO Growth in bank deposits The downward trend in District member bank deposits during the first half of the year was reversed in the third quarter, when substantial increases occurred. From July 1 to October 22, District member bank deposits regained four-fifths of the decline experienced in the first half of the year. Deposits declined somewhat at the time of quar terly tax payments in mid-September, but have risen steadily since then. Time deposits, virtually unchanged in July and August, rose in September and October. Redemption of Arm ed Forces Leave Bonds The deposit expansion was greatly accelerated by the cashing of Armed Forces Leave Bonds. Redemption of these bonds was heaviest in the first few days of Septem ber, and since then has been tapering off. The Federal September-October 1947 Reserve Bank of San Francisco, as fiscal agent for the Treasury, had received from commercial banks $143 million of redeemed terminal leave bonds through Octo ber 22. Redemptions at commercial banks to that date exceeded this total by the amount of redeemed bonds which had not yet reached this Bank. For the country as a whole at the same date, $857 million of redeemed terminal leave bonds, or 47 percent of the total amount outstanding on August 31, had been received by the Treasury. Redemptions in the Twelfth District consti tuted 17 percent of the total for the country as a whole, whereas the District has only 11 percent of the total resident population of the United States. This tends to confirm other estimates showing that the District has a larger proportion of veterans than other sections of the country. THE SHARP UPTURN IN COMMODITY PRICES at a comparatively even level during record peaks, while the volume of goods available for most of May and June, general commodity prices adcivilian consumption was sharply curtailed and prices vanced again during July, August, September, and early were held in check by government price controls. The October, and most of the price index numbers are cur resultant unspent income accumulated, largely in the rently at new highs. Price increases have been generally form of bank accounts and government bond holdings. diffused over a wide range of products, and only a few Funds in private hands are continuing to increase, largely important commodity groups, notably chemicals, have because of the rapid growth in bank loans. The significant rise in loans began in mid-1946 and has gained new im failed to share in the recent rise. petus in recent months. Among the commodities that have participated con As a result of this huge pool of savings, together spicuously in the upward price trend of the past few with postwar shortages of consumers’ durable goods, the months are coal, coke, steel scrap, pig iron, steel; auto mobiles and trucks; crude petroleum, fuel oil, gasoline; volume of purchasing power relative to the volume of lumber, cement; cotton, corn, wheat, barley, oats; hogs, obtainable goods has been abnormally high. Augmenting steers, hides, tallow; meat, dairy and poultry products; the inflationary pressure from this source, current in and citrus fruits. Some of these have receded somewhat come has continued to expand. Wage and salary pay from their recent highs, but most of them are well above ments in the second quarter of 1947 were estimated by the levels attained earlier in the year. Many other com the Department of Commerce at 16 percent above the modities, such as non-ferrous metals, newsprint, and most level reached in the second quarter of last year. Total textiles, as well as imported foodstuffs like sugar, coffee, personal income receipts continue to establish new high records and consumer outlays for goods and services are and cocoa, are at or near their peaks for the current year, correspondingly large. Business expenditures for plant which means, in effect, at their postwar highs. construction and equipment and for inventory building Retail prices have also continued to advance, although have also been maintained at very high rates, although at a diminished rate as compared with the last half of inventory gains have tapered off sharply in recent months. 1946, and at a more moderate pace than wholesale prices. Speculators have also taken advantage of the profit oppor The consumers’ price index of retail prices in large cities tunities in the present unstable price situation, and their compiled by the Bureau of Labor Statistics reached the activities have probably contributed to the rise of com highest point on record at mid-August— 160 percent of modity prices, especially in foodstuffs. the 1935-39 average. This was nearly 20 percent above On the supply side, the following influences have oper the level of June 15, 1946 and over 60 percent above the ated to increase costs or to restrict the free flow of goods August 1939 level. to market. The fresh round of wage increases that began last winter in the automobile, meat packing, rubber, steel, Forces contributing to price increases and electrical equipment industries, and culminated this A variety of factors, some general in character and summer in the bituminous coal industry, has tended to some special to particular products, have exerted an up raise unit costs of production very generally. Also, as ward pressure on prices during the current year. may be expected in a sellers’ market, there has been a On the demand side, one of the most fundamental widespread tendency to mark up prices to substantially factors continues to be the great expansion of liquid assets what the traffic would bear. Of similar effect were the held by consumers. During the war years incomes reached sharp increases in railroad rates granted at the beginning f t e r r e m a in in g A l September-October 1947 M O N TH LY REVIEW of the year and early in October. Sporadic work stoppages and persistent material shortages in some industries, nota bly the metal and building material lines, as wTell as freight car shortages, have also played a part in keeping prices up by preventing an even flow of production and shipment of manufactured goods. In addition to the above factors at work within our domestic economy, the large foreign demand for Ameri can commodities has been an important influence in sus taining the price level. In the second quarter of this year exports reached an annual rate of nearly $16 billion, as against a yearly average of about $3 billion during 193539. Prices of foodstuffs in particular were affected by the combination of high domestic and high export demand. Last year's crops were unusually large, but the rate of “ disappearance” of practically all cereals has also been unusually high. Export demand, chiefly for European re quirements, has contributed especially to the strength of the grain and livestock markets. 81 depend to a great extent on how much sympathy and active co-operation the program receives from the public. Grain prices and Twelfth District livestock In the Twelfth District wheat and other grains may well rise further in price if the voluntary grain saving programs should fail. Fortunately, the present feed situ ation in the District differs somewhat from that found in other regions of the United States. Corn and other grain feeding is considerably reduced through increased feeding of grass, cottonseed meal, and sugar beet by products. Total supplies of by-product feeds and supplies of hay per animal unit are near an all-time high. As of September 1, pasture conditions were better in the District than a year before (see map). They were estimated at 80 per- W heat consumption and prices The prospect of large continuing exports of foodstuffs, either on a relief basis or through some form of American governmental financing of European purchase programs, promises to remain an important influence on prices for some time to come. In fact, increasing concern is being expressed over the possibility of the United States meet ing minimum foreign needs for grain exports without pushing prices to still higher levels. Usually wheat makes up the bulk of United States grain exports, as it must this year, but a shorter than usual corn crop, partial Euro pean crop failure, and increased domestic consumption, present a difficult situation because much more wheat could be used than is now available. It has been estimated by the President’s Committee on Food and by the United States Department of Agriculture that wheat needs and supplies for 1947-48 will be about as follow s: Requirements Million bushels For food, seed, and industry...................................................................... For livestock feeding............ .. . ................................................ ................... 605 300 Total United States consumption.......................................................... 905 For export for foreign needs........................................................................ For United States carry-over to meet contingencies...................... 500 175 Total requirements ......................................................................................... 1,580 Supplies Carry-over from crop year 1946................................................................. 83 1947 production................................................................................................ 1,407 Total supplies .................................................................................................. 1,490 According to these estimates, wTheat supplies are de ficient by approximately 100 million bushels. Competitive dollar bidding for the available supply might eliminate those needing the wheat most and at the same time give still further impetus to the inflation spiral. To ease this situation and to obtain the estimated amount of grain needed for foreign shipments, an active effort is being made to curtail United States requirements through vol untary programs of reducing wheat consumption, both human and livestock. The success of this undertaking will cent of normal, or better, in well over half of the District. Rains since October 10 over most of the District have further greatly improved pastures. With the feeding of grain to livestock being curtailed to allow for its exporta tion, some further reduction in livestock is probable, although District livestock numbers may not be affected as much as livestock numbers in other areas. 82 FEDERAL RESERVE BANK OF SAN FRANCISCO September-October 1947 TERMINATION OF CONTROLS O N CONSUMER INSTALMENT CREDIT o v e r n m e n t co n tr o l of consumer credit through Regulation W , which has been in effect since Septem G ber 1, 1941, was terminated November 1, 1947 as the re sult of a bill passed by Congress last July. The regulation of consumer credit by the Board of Governors rested upon an Executive Order issued August 9,1941, under the Act of October 6, 1917. The purpose of the regulation was to help control inflationary forces during the war and post war periods. Regulation W served to restrict the demand for scarce goods by controlling the terms upon which in stalment credit could be obtained, and for a considerable period by prescribing certain rules for the administration of charge account sales and for the granting of single payment loans. The provisions of Regulation W 'w ere changed from time to time to meet varying conditions. The last change became effective December 1, 1946, at which time con trols on all types of consumer credit other than instalment credit were removed. The list of goods subject to down payment requirements was reduced substantially. For the goods remaining under control after December 1, 1946, the prescribed down payment has been 33 Y percent on all items except furniture and soft-surfaced floor cover ings, for which a down payment of only 20 percent has been required. The maximum maturity for all instalment credit made since that date, including instalment loans for purposes other than buying listed articles, has been 15 months. The size of both the down payments and the monthly payments prescribed by Regulation W was substantially larger than had been characteristic of consumer instal ment credit before the war. Consequently those people who were either unable or unwilling to meet the larger payments were excluded from the market and the demand for scarce goods was thereby diminished. This constituted one check, therefore, upon inflationary forces during the war and postwar periods. Fluctuations in volume of consumer credit since 1941 Both total consumer credit and total instalment credit in the country as a whole reached a prewar peak in the third quarter of 1941. Sixty percent of the $10 billion T o ta l E s tim a te d I n s ta lm e n t A m ou n t C red it O o f C o n s u m e r C redit u t s t a n d in g , and o f 1 9 3 9 -A u g u s t 1947 (in m illion s) End of year or month 1939 1940 1941 1942 1943 1944 1945 1946 1947— Jan uary .................... February ................. March ...................... April ........................ M ay ........................... T u n e ........................... July ........................... A ugust .................... Total consumer credit $ 7,994 9,146 9,895 6,478 5,334 5,776 6,637 10,157 9,982 9,939 10,255 10,464 10,729 10,992 11,061 11,216 Total instalment credit $4,449 5,448 5,920 2,948 1,957 2,034 2,365 3,976 4,048 4,156 4,329 4,536 4,739 4,918 5.047 5,195 1 Includes single-payment loans, charge accounts, and service credit. Other 1 $3,545 3,698 3,975 3,530 3,377 3,742 4,272 6,181 5,934 5,783 5,926 5,928 5,990 6,074 6,014 6,021 of consumer credit outstanding at that time consisted of instalment credit. The volume of all categories of credit started to decline thereafter, partly because of the con trols imposed by Regulation W and partly because of the increasing scarcity of goods customarily purchased on credit. At the low point in February 1944, total consumer credit amounted to $4.8 billion, of which $1.8 billion was instalment credit. Following a gradual rise during the remainder of 1944 and all of 1945, consumer credit expanded rapidly during 1946 and 1947. By August of this year it had reached an all-time high of $11.2 billion. Instalment credit, how ever, totaled only $5.2 billion, an amount nearly 20 per cent below its 1941 peak of $6.3 billion. Virtually all of the expansion so far this year has occurred in instalment credit, this being partly offset by a slight decline in charge accounts. The growth of consumer credit during 1946 and 1947 has been the result primarily of increased supplies and higher prices of consumer goods that are customarily pur chased on credit by many people. Other factors have also contributed to the expansion. A substantial increase in disposable personal income has made it possible for some consumers to increase their purchases of goods on credit. In the case of other consumer groups, the rising price level, without a corresponding increase in their income, may have induced somewhat greater reliance on credit to finance purchases of more costly durable goods. Expansion of consumer credit promotes inflation It was to be expected that consumer credit would ex pand as durable goods became increasingly available in the postwar period. At the same time, its expansion has been cause for concern because it has added to the already strong inflationary forces which have been present since the war. Since the end of 1945 total consumer credit has increased $4.6 billion. This constituted a substantial addi tion to total purchasing powrer at a time when it was al ready large relative to the available supplies of goods, and had a special impact on consumers’ durable goods which were in particularly short supply. The expiration of Regulation W on November 1 will result, in all probability, in more liberal terms for con sumer instalment credit. Several merchandising groups are said to be planning down payments as low as 10 per cent on furniture and appliances, and maturities will also be extended. Most of the proposals advanced by various associations in the consumer credit field, and by individ ual financing institutions, provide for a lengthening of maturities and, in some cases, a reduction in down pay ments on instalment purchases. While these associations and institutions have urged, at the same time, that credit terms should not be relaxed excessively, competition is likely to result in a progressive breakdown in standards. But the longer this development can be forestalled, the less will be the inflationary pressure arising out of con sumer credit. Septem ber-October 1947 83 M O N TH LY REVIEW Commercial banks can play an important role in dis couraging the return of unduly liberal credit terms. They not only hold about 40 percent of the outstanding amount of consumer instalment credit, but they also supply funds through business loans to sales finance companies, retail ers, and other organizations extending instalment credit. Although total consumer credit is at an all-time high in absolute terms, its ratio to disposable personal income is substantially less than in prewar years. For the three years 1939-41, total consumer credit outstanding aver aged about 11 percent of disposable personal income, while the average in 1946 and the first eight months of 1947 was about 5.5 percent. The corresponding ratios for total instalment credit were about 6 percent and 2.3 per cent. The fact that consumer credit is relatively less of a charge on consumer incomes than in prewar years means that its liquidation during any recession which might de velop would have less of a tendency to accelerate the de cline in economic activity than if it were at a higher level. But the significant fact today is that any expansion in consumer credit, at whatever level, adds to the purchas ing power which is already excessive in relation to the supply of goods. Since production is near physical ca pacity, consumer credit expansion can only increase in flationary pressures which are already strong. SURVEY OF HOUSING CONDITIONS IN FIVE METROPOLITAN AREAS, 1940 AND 1947— TWELFTH DISTRICT a m p l e population surveys were conducted by the Cen Ssus Bureau in 34 selected metropolitan districts in April 1947. About 3,500 to 3,700 private dwelling units and their inhabitants were included in the five surveys made in the Twelfth Federal Reserve District. Results have now been published covering population character istics, status of the labor force, and housing conditions in the metropolitan districts of Los Angeles, San FranciscoOakland, Seattle, Portland, and Salt Lake City. In this article some of the principal findings of the housing survey are presented and compared with relevant data from the census enumeration of 1940. Dwelling units lagged behind population growth The total number of dwelling units in the five western metropolitan areas included in the 1947 surveys increased between 1940 and 1947 by about 556,000, or approxi mately 30 percent. Although this rate of increase was nearly double that of the 34 metropolitan districts as a whole, the growth in housing space in the western areas failed to keep pace during this period with their rapidly expanding population. The rate of population growth ap preciably exceeded that of dwelling units in the three lead ing western districts, and was only slightly below it in the two others. In the five districts taken as a whole, population increased from about 5,400,000 to around 7,300,000, or a gain of 35 percent; the San FranciscoOakland district grew by almost 40 percent. The number of dwelling units in each area in 1947 and 1940, with rates of increase in dwelling units and in population, are shown in Table 1. T a b l e 1— I n c r e a s e i n D w e lli n g U n i t s a n d P o p u la tio n , F iv e M e t r o p o lit a n District /—Number of dwelling units-^ 1947 1940 (thousands) (thousands) Los A n g e l e s ...................... San Francisco-Oakland. S e a t tle ................................. Portland ............................. Salt Lake C ity................. TOTAL A reas, ................... 1940-47 (— Percent increase— ^ Dwelling units Population 1,280 664 203 187 70 999 485 164 142 57 28 37 23 32 22 35 39 33 31 20 2,404 1,848 30 35 Of a total of about 2,400,000 dwelling units in the five metropolitan districts in April 1947, some 12,000 were auto trailers, tourist cabins, shacks, river boats, barns, sheds, and the like. Trend to home ownership A notable increase in the proportion of home owner ship occurred in each of the five metropolitan districts between 1940 and 1947 (Table 2 ). This shift was most pronounced in the Los Angeles district, and least marked T a b l e 2 — P e r c e n t a g e o f D w e l l i n g U n i t s O c c u p ie d by O w ners District Los A n g e l e s ........................................................................................... San Francisco-Oakland ................................................................... S e a t t le ....................................................................................................... Portland .................................................................................................. Salt Lake C ity ...................................................................................... 1947 53 49 62 63 64 1940 40 41 50 53 55 in the Salt Lake City district. The latter district rated highest, however, in the absolute proportion of home ownership both in 1940 and in 1947. The lowest rating in this respect was held by the Los Angeles district in 1940 and by the San Francisco-Oakland district in 1947. On the average, the owner was living in about 50 per cent of the dwelling units surveyed, though the percentage was lower than this in a number of the more populous cities. The percentage of owner-occupied dwellings varied in 1947 from 30 percent in New York and New Orleans to 68 percent in Akron. The two metropolitan districts in California had about the average number of owneroccupied dwellings, the three other western districts had a larger percentage of owner occupancy. The percentage in the five western districts combined somewhat exceeded that of the average for the other metropolitan areas. Size of households, number of rooms, overcrowding Little change has occurred between 1940 and 1947 in the average size of household1 or in the average number of rooms per household in the five western metropolitan districts (Tables 3 and 4 ). According to the survey analysis, the average number of persons per occupied 1 A11 averages used by the Census Bureau in this study are medians. The median is the value of the middle item in a series. 84 FEDERAL RESERVE BANK OF SAN FRANCISCO dwelling unit increased slightly in the Seattle district be tween 1940 and 1947, declined slightly in the Salt Lake City district, but remained constant in the other three T a b l e 3 — N u m b e r o f P e r s o n s P e r O c c u p ie d D w e l l i n g U n i t Ail District Los A n geles.................... San Francisco-Oakand Seattle ............................. Portland ..................................... Salt Lake C ity ......................... dwelling units 2.7 2.6 2.6 2.6 3.2 ------1947-----Owneroccupied units 3.1 2.9 2.9 2.9 3.6 Tenantoccupied units 2.3 2.3 ,----- 1940— \ A ll dwelling units 2.7 2.6 2.6 2.2 2.2 2.5 2.7 3.3 districts. In 1947 both the number of persons and the number of rooms per household was significantly larger for owner-occupied households than for tenant-occupied units. The average number of rooms per dwelling unit T a b l e 4 — N u m b e r o f R o o m s P e r O c c u p ie d D w e l l i n g U n i t (------------------------ 1947------------------------ s A ll dwelling District units L os A n geles............................. 4.4 San Francisco-O akland .. . . 4.5 Seattle ....................................... 4.4 Portland .................................... 4.6 Salt Lake C ity ........................ 4.5 Owneroccupied units 5.1 5.2 5.1 5.2 5.0 Tenantoccupied units 3.3 3.4 3.0 2.8 3.3 t— 1940— * All dwelling units 4.3 4.6 4.3 4.8 4.4 increased slightly between 1940 and 1947 in the Los Angeles, Seattle, and Salt Lake City districts, but de clined slightly in the San Francisco-Oakland and Port land districts. The number of persons per dwelling unit varied from 2.6 to 3.5, with the average at 3.2 persons. The data suggest that western families or living groups tend to be smaller, on the average, than those in other sections of the country. The four leading western districts, for ex ample, had fewer persons per dwelling unit than any of the other 34 metropolitan districts included in the surveys. The number of rooms per dwelling unit varied from 4.2 to 5.9. The ten metropolitan districts having the most rooms per dwelling were all in the northeastern and New England states. The five districts having the smallest number of rooms were all in the South or Southwest. Of the five western metropolitan districts, four were slightly below the general average of 4.6 rooms per unit. The extent of overcrowding, as indicated by the pro portion of dwelling units having more than 1.5 persons per room, showed a slight tendency to increase between 1940 and 1947 in the San Francisco-Oakland and Port land districts, declined somewhat in the Salt Lake City district, and remained unchanged in the Los Angeles and Seattle districts (Table 5). In every district, however, overcrowding in 1947 was considerably higher for tenantT a b l e 5— P e r c e n t a g e o f D w e l l i n g U n i t s H a v i n g M o r e Than District Los A n g e le s ...................... San Francisco-Oakland. Seattle ................................ Portland ............................. Salt Lake C ity ................. 1.5 P e r s o n s P e r R o o m e--------------- ------- 1947------- ---------------- \ AH dwelling units 4 3 3 4 6 Owneroccupied units 2 2 2 2 4 Tenantoccupied units 6 3 5 8 9 ,— 1940— A1! dwelling units 4 2 3 3 8 occupied premises than for owner-occupied dwellings; the difference was least marked in the San FranciscoOakland district, and greatest in the Portland district. Septem ber-O ctober 1947 As compared with other districts, the extent of over crowding in the western areas was not greatly different in 1947 from that in the half dozen larger cities in other parts of the country. Extremely high rates prevailed in several of the southern and southwestern districts, where houses are small; from 8 to 16 percent of dwelling units had more than 1.5 persons per room. On the other hand, only 1 to 2 percent of the dwellings in New England and the northwestern states, where the typical dwelling unit tends to be larger than average, had more than 1.5 persons per room. Sharp increases in rents since 1940 Tenants in the five western metropolitan districts, like those in all other districts included in the Census surveys, paid considerably higher rents in 1947 than in 1940. Average monthly rents increased during this period by amounts ranging from 24 percent in the San FranciscoOakland district to nearly 74 percent in the Portland district (Table 6 ). T a b l e 6— A v e r a g e M o n t h l y R e n t o f A l l T e n a n t - O c c u p i e d D w e l l in g U n it s t------- Amount------ ^ District Los A n g e le s ................................................... San Francisco-Oakland ........................... S e a t t le ............................................................... Portland .......................................................... Salt Lake C ity ............................................. 1947 $35 36 35 33 34 1940 $27 29 22 19 23 Percent increase 30 24 59 74 48 Rents had become much more uniform in 1947. In 1940 the average monthly rent ranged from $19 in the Port land district to $29 per month in the San FranciscoOakland district. The range was much narrower in 1947, with a spread of only $3 from high to low, centering about $35. For the five districts as a whole about one-third of all tenants in 1947 were paying less than $30 per month in rent, about one-third paid between $30 and $39 per month, and about one-third paid $40 or more per month. The average increase in the five western districts com bined was approximately one-third, or substantially the same as in most of the other metropolitan districts. In general, the extreme advances occurred in the southern and western districts, the moderate increases in New England and in the largest urban centers. Type of dwelling unit increasingly one-unit detached structure The proportion of single-unit dwellings, including both attached and detached structures1, increased between T a b l e 7— P e r c e n t ag e of O n e - D w e l l in g - U n i t District Los A n g e le s ........................ San Francisco-O akland.. Seattle .................................. Portland ................................ Salt Lake C i t y ................... Detached — structures only— 1947 1940 66 64 50 50 68 65 69 72 67 65 S tructures Attached and (— detached structures— 1947 1940 71 65 57 55 69 66 71 72 69 66 1940 and 1947 in all the western districts except Portland, where relatively large numbers of multi-unit structures JA “ one-dwelling-unit detached structure” is defined as having open space on four sides. The classification “ one-dwelling-unit attached structure” re fers chiefly to “ row houses.” Septem ber-October 1947 85 M O N TH LY REVIEW were erected during the war. The number of single-unit attached structures increased much more rapidly than that of single-unit detached structures in all areas, but detached structures represented a larger proportion of all dwelling units in 1947 than in 1940, except in the San Francisco-Oakland and Portland districts. The proportion of single-unit dwelling structures in 1947 varied widely among the entire group of 34 metro politan districts, ranging from about 30 percent in New York and Chicago to 80 percent in San Antonio. All the western areas except San Francisco-Oakland stood rela tively high in the list. The percentage of single-unit dwelling structures in the western districts in 1940 and 1947 appears in Table 7. Mosf dwelling units have modern conveniences Considerable improvement has occurred since 1940 in the provision of sanitary facilities and other modern con veniences in the housing units of the western metropolitan districts. Over 90 percent of the dwelling units in the two California districts, and a somewhat smaller propor- tion in the other areas, had all of the following facilities in 1947: electric light and running water; flush toilet, bathtub or shower, and installed cooking facilities for exclusive use of the unit’s occupants. These ratios com pare favorably with those for the other districts included in the 1947 surveys. The San Francisco-Oakland and Los Angeles districts were at the top of the list and the other western areas, except Portland, were well above average. Completely comparable data for 1940 are not available. Table 8 shows the 1947 ratios for the five western dis tricts. Maintenance has improved since 1940 Standards of housing maintenance have shown marked improvement since 1940 (Table 9 ). The proportion of dwelling units in need of major repairs in that year varied from 4 percent in the Los Angeles district to as high as 11 percent in the Salt Lake City district. By 1947 the range had been reduced to 1 percent in the Los Angeles district, with a maximum of 4 percent in the Portland and Salt Lake City districts. T a b l e 9— P e r c e n t a g e o f D w e l l i n g U n i t s i n T a b l e 8— P er c e n tag e of D w e l l in g U n it s H a v in g S elected M odern F a c il it ie s District 1947 Los A n g e l e s ...................................................................................................................... San Francisco-Oakland .............................................................................................. S e a t tle .................................................................................................................................. Portland ............................................................................................................................. Salt Lake C ity................................................................................................................. 92 95 89 83 89 N eed M a j o r R e p a ir s of District 1947 Los A n g e le s .................................................................................................. ..1 San Francisco-Oakland .......................................................................... ..2 S e a t tle .............................................................................................................. ..2 Portland ............................................................................................................4 Salt Lake C ity................................................................................................4 1940 4 9 6 8 11 INCOME PAYMENTS TO INDIVIDUALS, 1940-46— TWELFTH DISTRICT recent estimates of the Department of larger than the national increase of 123 percent during high of $21.9 billion in 1946— an increase of about 7.5 percent as compared with an increase of about 9 percent in the country as a whole. The 1946 income payments in the Twelfth District comprised approximately 12.9 per cent of the United States total. This represents a decline from 1945, when District income payments were 13.1 percent of the total, but is still substantially higher than the ratio of 10.8 percent in 1940 (Table 1). The 168 per cent increase in Twelfth District income payments during the period 1940 to 1946 was greater than the increase in any other section of the country, and more than one-third Over the period from 1929, the first year for which these Department of Commerce estimates are available, to 1940, the Twelfth District gradually gained a larger share of total United States income payments, and the early war years greatly accelerated this trend. As shown in Table 1, the Twelfth District’s share expanded steadily from 1940 to 1943, was unchanged in 1944, and declined in 1945 and 1946. It is difficult to determine how much of the net increase since 1940 in the Twelfth District share of the country’s total income payments has been due to temporary con ditions reflecting the influence of the war, and how much c c o r d in g to Commerce, income payments to individuals in thethe same period. A Twelfth District rose from $20.3 billion in 1945 to a new l T a b le 1— A m o u n t o f T o t a l In c o m e P a y m e n t s t o In d iv id u a ls , and P ercen t C hange, B y S ta te s— T w e lfth 1940-46, D is t r ic t 1 1946 Percent change 1940-46 627 14,879 588 235 1,729 3,118 689 + 164.6 + 1 6 5 .4 + 1 5 3 .4 + 1 5 5 .4 + 1 7 3 .1 + 183.5 + 160.0 (in millions) 1940 State A r iz o n a ...................................................................... C a lifo rn ia ................................................................. Idaho ........................................................................ Nevada ...................................................................... O r e g o n ...................................................................... W a s h in g to n ............................................................ Utah ........................................................................... $ 237 5,606 232 92 633 1,100 265 1941 $ 287 7,044 278 107 824 1,501 329 1942 $ 445 9,315 419 207 1,193 2,211 527 1943 $ 598 12,302 477 211 1,572 2,894 687 1944 $ 582 13,472 527 206 1,636 3,203 635 1945 $ 594 13,649 525 210 1,631 3,052 649 $ .................... 8,165 10,370 14,317 18,741 20,261 20,310 21,865 + 1 6 7 .8 United States ....................................................... Twelfth District as percent of U . S. total. 75,852 10.8 92,269 11.2 116,433 12.3 140,021 13.4 151,217 13.4 155,201 13.1 169,373 12.9 + 123.3 -------- TW ELFTH D IS T R IC T 1 United States Department of Commerce (Bureau of Foreign and Domestic Commerce), Survey of Current Business, August 1947, p. 21. 86 September-October 1947 FEDERAL RESERVE BANK OF SAN FRANCISCO of it represents a permanent shift in the geographical dis tribution of income payments. The movement of popula tion to the western states suggests that to some degree the change is permanent, and that the share going to the West may continue to be greater than before the war. However, although population changes are an important influence on income payments, they are only one among many factors affecting total income. Judgments regard ing the permanence of income changes must therefore be made with caution. Although the increase in total income payments was greater in the Twelfth District than in the United States, the increase in population in the District relative to the country as a whole was even greater, with the result that there was a smaller increase in per capita income in the District than in the United States. This relationship was even more striking in Califor nia, where per capita income increased only 90 percent; T a b le 2— E s tim a te d P e r C a p ita In c o m e P a y m e n t s in S t a t e s o f th e T w e lfth D is tr ic t, Income payments increased in all Twelfth District states Each of the seven states of the Twelfth District shared in the increased income payments between 1940 and 1946, the greatest percentage increase taking place in Wash ington and the highest dollar increase in California. Although total income payments dropped slightly in three states between 1944 and 1945, they rose in all states of the District between 1945 and 1946, and in 1946 every Twelfth District state but Washington en joyed the highest level of income payments since 1929. Per capita income payments In California, Idaho, and Nevada, per capita income payments rose in 1946 over 1945, but they declined in the other states of the Twelfth District (Table 2 ). In all states per capita income payments were much higher in 1946 than in 1940. State 1940 . $473 805 California .......... 440 N e v a d a .............. 836 579 Utah ................... 480 632 W ashington . . . United States.,. 575 1940-461 1944 1941 1942 1943 1945 1946 $539 $ 751 $ 889 $ 957 $1,026 $ 995 956 1,462 1,185 1,557 1,503 1,531 516 789 893 1,014 1,112 1,243 1,583 1,477 1,375 1,511 1,703 907 723 1,029 1,249 1,255 1,231 1,188 578 882 1,068 1,054 1,073 1,063 825 1,152 1,425 1,534 1,406 1,346 693 862 1,037 1,117 1,177 1,200 Percent change 1940-46 [-110.4 - 90.2 -182.5 -103.7 -105.1 -1 2 1 .4 -1 1 2 .9 + 108.7 1 Based on United States Department of Commerce (Bureau of Foreign and Domestic Com m erce), Survey of Current Business, A ugust 1947, p. 22, and September 1947, p. 24. and to a lesser extent in Oregon and Nevada, where per centage increases were also below the national average. In the remaining Twelfth District states the 1940-46 in creases were relatively greater than the rise from $575 to $1,200 shown for the entire country. This was particu larly true in Idaho, where per capita income payments almost tripled between 1940 and 1946. RECENT DEVELOPMENTS IN BUSINESS, AGRICULTURE AND INDUSTRY California lumber production reached an all-time peak in 1946, with a total cut of about 2.7 billion board feet, an increase of 18.6 percent over 1945. Pine Region production during the year was 35.4 percent above 1945, but output in the Redwood Region was 23.6 percent lower than in the previous year. Production in the major redwood mills was adversely affected by a strike during most of 1946. Forecasts indicate a substantial increase of total lumber production in California in 1947. • • • • • Of 25 United States counties leading the nation in value of farm products sold and used in 1944, 16 were in California, according to the 1945 Census of Agriculture. Los Angeles County was at the top of the list, with farm production worth $131 million; Fresno and Tulare were next. • • • • • Weather conditions in Kansas, Oklahoma, and Texas are caus ing grave concern to wheat farmers, who fear a recurring dust bowl and reduced production of wheat next year. • • • • • Net public and private indebtedness at the beginning of 1947 amounted to $393 billion, according to Department of Commerce estimates. This was almost $15 billion lower than a year earlier, and represents the first decline since 1931. An increase of $8 billion in private indebtedness during 1946 was more than offset by a decrease of $23 billion in Federal government debt, which the Treasury effected by using the large cash balance built up in its W ar Loan account during the Victory Loan Drive late in 1945. A s this will not be repeated, it is unlikely that another such re duction in total indebtedness will occur in 1947. • • • • • The United States Department of Agriculture announces that the Farmers Home Administration will be in a position to make about 130,000 loans to owner-operators of family-type farms (i.e., farms operated without hired labor except during peak seasons) who are unable to obtain credit elsewhere. These loans may be made, up to $100 million per year, from a fund authorized by the 79th Congress and appropriated by the 80th Congress. The cost to the borrower will be approximately 3 ^ percent, and the return to the lender 2*4 percent, the difference representing the cost of F H A administration and insurance. Fully-insured loans may be made, repayable in 40 years, up to 90 percent of the reasonable value of the farm and its improvements. • • • • • Based on October 1 conditions, the United States Department of Agriculture’s estimate of the cotton crop has been reduced by 341 thousand bales. The current forecast is for about 11.5 million bales, 33 percent above last year’s crop but about 7 percent below the 1936-45 average. California will produce 680 thousand bales, with production estimated at 614 pounds per acre. Cotton crop conditions in California were reported at 96 percent of normal; general conditions were 72 percent of normal. • • • • • August redemptions of Series E Savings Bonds ($314.6million) were 21 percent less than in August 1946, while new purchases ($294.4 million) wrere down only 15 percent. • • • • • The index of prices received by farmers reached a new all-time high of 289 on October 15. This was a rise of three points from September 15 and of thirteen points since August 15. Prices paid by farmers also rose to a new all-time high of 239, which is two points above last month. The index of prices received is now 23 percent higher, and the index of prices paid is 18 percent higher, than the record set in 1920 after World W ar I. • • • • • Farm wage rates October 1 were seven percent higher than a year ago and more than four times the 1910-40 average. About 11.7 million people were working on farms on October 1 (family workers, 8.9 million, hired workers 2.8 million). The increase of 242,000 over the number a year ago was mainly hired workers. Total farm population as of January 1, 1947, was estimated to be 27.5 million. This is 2.4 million above the wartime low reached in January 1945, and 2.7 million below the 30.2 million of 1940. The Pacific and New England states are the only ones now having a farm population greater than in 1940. Septem ber-O ctober 1947 The Land Bank Commissioner of the Farm Credit Administra tion reports that all twelve of the Federal Land Banks have now become fully owned by farmers. In the Banks’ thirty years of op eration, over a million and a quarter farmers have obtained farm mortgage loans amounting to approximately $5 billion. A record crop of filberts, 20 million pounds compared with 18 million last year, will be marketed by cutting prices about 35 percent below those of 1945. Imports are expected to be 28 million pounds. On April 1 there were 5 million pounds in storage; most of these were sold by clearances during the spring and summer. 87 M O N TH LY REVIEW In two decades the value of the United States filbert crop has risen from $18 thousand to over $4 million. Of the 19,000 acres of filbert trees, Oregon has 85 percent, Washington most of the rest. Acreage is increasing. Orchards are small, many of only 8 acres. Yield is generally 1,000 to 1,200 pounds per acre ; the grower nets about 4 to 6 cents a pound. New wholesale prices will be from 18 to 25 cents a pound compared with 22 to 34 cents last year. • • • • • The California Walnut Growers Association announced prices on the 1947 crop 21 percent lower than in 1946, or 39 to 47 cents a pound retail compared with 49 to 55 cents last year. 88 FEDERAL RESERVE BANK OF SAN FRANCISCO Septem ber-O ctober 1947 BUSINESS INDEXES—TWELFTH DISTRICT 1935-39 Average— 1001 Industrial production (physical volume) 2 Factory employment4 Factory payrolls* Petroleum* Year and month Lumber Ad justed 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 1939 1940 1941 1942 1943 1944 1945 1946 Unad justed 148 112 77 46 62 67 83 106 113 88 110 120 140 140 133 Crude Refined Unad justed Unad justed 118 121 95 78 74 72 73 86 89 99 104 93 93 96 103 118 129 135 131 193 168 140 134 127 123 140 154 163 159 160 158 172 175 194 226 243 219 138 108 Cement Ad justed Wheat flour3 Unad justed Ad justed 110 96 74 48 54 70 68 117 112 92 114 124 164 194 160 128 131 165 Unad justed Electric power Ad justed 115 107 110 98 97 106 113 109 114 111 123 118 120 120 132 136 152 147 Unad justed California Ad justed 83 84 82 73 73 79 85 96 105 102 112 122 136 167 214 231 219 219 Unad justed California Ad justed 100 86 73 61 66 79 87 99 112 98 104 122 173 270 363 335 246 177 Unad justed 111 93 73 54 53 64 78 96 115 101 110 134 224 460 705 694 497 339 1946 August September October November December 113 120 122 128 133 139 139 133 122 100 131 131 131 132 133 234 222 229 227 221 167 170 161 182 182 182 182 175 176 170 136 129 130 133 166 136 154 154 146 166 222 227 236 237 243 231 227 229 232 240 187r 184 187 192 192 188r 185 188 193 193 369r 360 372 372 387 371r 361 375 373 388 1947 January February March April $5 : May June July ' !£ August September 155 172 143 132 130 131 126 130 131 1106 121 124 135 151 151 140 158 154 134 136 137 137 138 139 139 139 2191 227# 255 259 267 264 261 279 191 182 207 193 193 186 184 185 164 166 190 196 195 202 195 201 174 162 165 173 179 179 164 143 118 174 162 162 153 158 157 144 143 140 250 249 252 254 251 251 246 244 248 252 253 257 252 262 194 192 193 192 190 187 184 189 191 191 191 192 192 190 187 184 189 191 386 387 390 392 392 394 392 407 411 379 384 389 392 394 396 392 409 412 Carloadings (number)8 Year and month Merchandise and miscellaneous Total Ad justed 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 1939 1940 1941 1942 1943 1944 1945 1946 Unad justed Ad justed 112 96 75 57 58 66 72 85 90 79 85 90 105 113 109 115 110 111 Unad justed 252 263 Department store sales (value)3 Other Ad justed 114 105 89 74 70 81 85 97 102 90 96 99 116 121 119 130 131 132 District Unad justed Ad justed 109 84 57 37 43 48 56 70 75 65 72 79 91 103 97 97 83 86 Unad justed Dept, store stocks (value)5 Cali fornia Pacific North west Utah & So. Idaho Ad justed Ad justed Ad justed 112 104 94 71 68 77 86 100 105 100 109 116 139 169 201 221 244 306 109 103 94 72 68 75 86 99 106 100 109 117 136 160 192 217 242 304 115 106 91 68 66 78 85 100 105 100 110 117 146 189 219 232 252 310 124 111 97 69 72 82 89 99 104 98 110 116 138 174 212 217 237 304 All items Food Unad justed Unad justed 132 125 110 89 80 86 89 97 108 101 106 113 137 187 172 177 182 238 121 8 llg 1 108*2 98^8 93! 6 95.3 97.0 97.9 102.2 102.0 101.0 101! 1 106! 3 119.4 126! 1 128.3 131 7 142 !l 132.0 124.8 104 !o gg*8 86 8 93.2 99.6 100! 3 104 5 District Ad justed Consumers' prices» Unad justed 99 0 96*9 97.6 107^9 130 9 143! 4 142'. 1 146 3 167! 4 1946 August September October November December 102 109 109 111 121 118 126 128 112 107 125 125 125 134 145 140 148 151 134 129 74 90 89 83 91 90 100 99 84 79 324 313 319 319 317 291 326 330 376 503 311 308 320 325 310 333 312 313 307 329 364 319 301 289 305 240 249 270 296 334 263 281 299 313 273 145.7 147.7 150.6 156.2 156.9 176.1 179.7 186.2 199.9 198.4 1947 January February March April May June July August September 136 134 117 120 112 115 122 109 108 108 111 109 117 112 124 124 125 124 146 150 129 130 131 134 133 129 121 122 125 120 122 123 142 142 145 142 124 113 103 108 88 91 107 82 91 89 93 96 111 98 101 102 100 101 313 330 325 315 323 319r 329 340 321 249 278 295 297 300r 293r 271r 306 335 307 317 318 314 321 317 322r 329 317 318 352 336 311r 331r 324r 333r 349 323 326 335 314 313 279 294 349 363 312 315 330 331 308 287 280 267 248 253 277 290 308 304 298 285 283 272 285 156.7 156.7 158.2 159.0 158.7 157.6 195.7 193 5 196.6 197.8 197.3 194.8 196.5 197.9 1 The terms adjusted and ‘ unadjusted” refer to adjustment of monthly figures for seasonal variation. Excepting department store statistics, all indexes n o n 6 upon data from outside sources, as follows: Lumber, various lumber trade associations; Petroleum and Cement, U.S. Bureau of Mines; Wheat flour, U.S. Bureau of the Census; Electric power, Federal Power Commission; Factory employment, Factory payrolls, and Consumers’ prices, U.S. Bureau of Labor Statistics and cooperating state agencies; and Carloadings, various railroads and railroad associations. a Daily average. * 1923-25 daily average=100. 4 Wage earners only. Excludes fish, fruit and vegetable canning. 6 At retail, end of month or end of year. 6 Los Angeles, San Francisco, and Seattle indexes combined, p-preliminary. r-revised. Septem ber-October 1947 89 M O N TH LY REVIEW BANKING AND CREDIT STATISTICS-TWELFTH DISTRICT (amounts in millions of dollars) C o n d itio n ite m s o f all m e m b e r b a n k s 1 Y ear and m o n th L o a n s an d d iscou n ts T o ta l 2 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 1939 1940 1941 1942 1943 1944 1945 1946 2,239 2,218 1,898 1,570 1,486 1,469 1,537 1,682 1,871 1,869 1,967 2,130 2,451 2,170 2,106 2,254 2,663 4,068 1946 August September October November December 3,334 3,601 3,794 3,954 4,068 1947 January February March April M ay June5 July August September 4,140 4,254 4,364 4,479 4,558 4,658 4,755 4,879 4,997 In v e stm en ts* C o m l., in d . For p u rc h ., & agric. carry’ g secs. R eal e sta te U .S . G o v ’ t secu rities A ll o th e r 647 721 711 635 228 309 560 495 467 547 601 720 1,064 1,275 1,334 1,270 1,323 1,450 1,482 1,738 3,630 6,235 8,263 10,450 8.426 560 9,624 9,171 9,157 8,815 8.426 668 670 662 686 663 664 735 933 870 934 956 1,103 1,882 730 798 864 931 82 76 65 59 51 62 184 343 195 1,882 1,000 974 899 885 908 1,431 195 211 1,431 134 2,047 327 362 399 460 275 1,828 A ll oth e r secu rities 458 561 560 528 510 575 587 614 498 486 524 590 541 538 557 698 795 908 900 891 908 8,303 8,058 7,909 7,677 7,662 7,370 7,375 7,353 7,364 649 911 893 894 876 862 871 874 871 T im e D em and d eposits dep osits (except U .S. a d ju s te d 3»* G o v ’ t) * 1,234 1,158 984 840 951 1,776 1,915 1,667 1,515 1,453 1,759 2,006 2,078 2,164 1,201 1.389 1,791 1,740 1,781 1,983 2.390 2,893 4,356 5,998 6,950 8,203 8,821 2,263 2,351 2,417 2,603 3,197 4,127 5,194 5,781 8,566 8,630 8,757 8,801 8,821 5,570 5,609 5,669 5,696 5,781 8,704 8,367 8,327 8,334 8,260 8,297 8,366 8,462 8,600 5,761 5,804 5,820 5,837 5,851 5.908 5,888 5,887 5.909 2,212 U .S . G o v ’ t deposits* 36 49 99 148 233 228 167 96 90 127 118 68 144 307 842 1,442 2,050 303 1,122 853 808 610 303 308 370 396 286 235 103 148r 208 216 M e m b e r b an k reserves an d related it e m s 6 Y ear an d m o n th C oin an d cu rrency in circu lation Reserve b an k c red it 7 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 1939 1940 1941 1942 1943 1944 1945 1946 C o m m e rcia l o p era tio n s 7 — 34 — 16 + 21 — 42 — 2 — 7 + 2 + 6 — 1 — 3 + 2 + 2 + 4 +107 +214 + 98 — 76 + 9 1946 August September October November December + 28 — 26 — 162 + 74 + 37 1947 January February March April M ay June July August September +109 + 14 — 62 — 2 + 34 — 21 — 234 — 48 — 87 T reasu ry o p era tio n s 7 T o ta l 7 ■— — — — — — __ — — — — — 0 53 154 175 110 198 163 227 90 240 192 148 596 —1 ,980 — 3,751 — 3,534 — 3,743 — 1 ,607 — — — — + — — + — — — + 73 15 29 136 37 35 25 3 69 14 41 213 78 85 + + + + + + + + + + + + 23 89 154 234 150 257 219 454 157 276 245 420 + 1 ,000 + 2 ,826 + 4 ,486 + 4 ,483 + 4 ,682 + 1 ,329 + — 223 — — 168 133 50 47 49 7 381 124 172 + + + + + + + + + + + + + + — 95 20 + + — + + + — + + + 111 62 — — — + — — — — + — — — - F .R . n o te s of F .R .B . o f S .F . 6 16 48 30 18 4 14 38 3 20 31 96 227 643 708 789 515 326 0 189 186 231 227 213 211 280 335 343 361 388 493 700 1,279 1,937 2,699 3,219 2,871 175 183 147 142 185 242 287 479 549 565 584 754 930 1,232 1,462 1,706 2,033 2,094 7 2,871 81 32 30 18 2,800 2,765 2,735 2,716 2,714 2,695 2,669 2,685 2,675 2,081 1,981 2,003 1,997 1,993 1,992 1,963 2,078 2,095 2 2 10 13 23 23 10 2,890 2,878 2,875 T o ta l 2,045 2,005 2,040 2,092 2,094 9 2,866 B a n k d ebits index 31 cities« R eserves 8 R equired 171 180 154 135 142 172 20 1 Excess 4 5 4 — U n a d ju ste d 146 126 97 8 68 37 84 63 72 87 100 10 2 111 351 470 418 459 515 720 1,025 1,343 1,598 1,878 2,051 119 70 142 138 257 245 262 103 104 136 59 237 260 298 1,958 1,987 292 306 310 313 339 322 325 332 309 297 322 305 322 325 2,030 2,051 54 55 56 54 59 2,043 1,982 1,940 1,934 1,934 1,944 1,956 1,985 2,028 60 51 61 63 59 51 60 62 80 2,002 98 10 2 110 134 165 211 1 Annual figures are aa of end of year; monthly figures are as of last Wednesday in month or, where applicable, as of call report date. 2 Monthly data for 1946 partly estimated. 3 Demand deposits, excluding interbank and U.S. G ov’t deposits, less cash items in process of collection. * M onthly data partly estimated. e End of year and end of month figures. 7 Changes only. &Figures as of call report date; previous figures were as of last Wednesday in month. 8 Total reserves are as of end of year or month. Required and excess: monthly figures are daily averages, annual figures are December daily averages. 9 Debits to total deposit accounts, excluding interbank deposits. 1935-39 daily average=100. p-preliminary. r-re vised. 90 FEDERAL RESERVE BANK OF SAN FRANCISCO September-October 1947 National Summary of Business Conditions INDUSTRIAL PRODUCTION Released October 25, 1947— Board of Governors o f the Federal Reserve System output and employment expanded somewhat further in September. Value of retail trade increased, reflecting partly a further rise in prices. In the early part of October department store sales declined. Prices of wheat, hides, rubber, and steel scrap showed marked advances, while prices of most other basic commodities showed little change. I n d u str ia l I n d u s t r i a l P r o d u c t io n Federal Reserve indexes. M onthly figures, latest shown are for September. MEMBER BANK RESERVES AND RELATED ITEMS Output of manufactured products and minerals showed some further rise in September, and the Board’s seasonally adjusted index of industrial production advanced three points to 185 percent of the 1935-39 average. This was the same as the May index and 5 points below the postwrar peak in March of this year. Activity in durable goods industries as a group increased further in September owing mainly to larger output of steel and of most types of machineryand transportation equipment. Steel production was temporarily curtailed around the middle of the month as a result of an industrial dispute, but advanced sharply in the latter part of the month and continued to rise in October, reaching a scheduled rate of 97 percent of capacity. Output of passenger automobiles and trucks rose sharply in September, but declined again in the early part of October. Production of railroad equipment, chiefly freight cars, showed a substantial gain in September, reflecting in part improved supplies of materials. Output of building ma terials was maintained in large volume to meet demands arising from the advanced rate of construction activity. The Board’s index of nondurable-goods output showed a slight increase in September, reflecting mainly increased production of rayon textiles, paperboard, and petroleum prod ucts. Activity at cotton mills and output of manufactured food products and some other nondurable goods showed little change from the level of the preceding month. Minerals production rose further in September, reflecting a new record rate of crude petroleum output and a substantial gain in coal production. Output of bituminous coal advanced seven percent and was close to the same volume produced in September of last year. Output of fuels continued to rise in early October, under the pressure of exception ally strong demand. E m ploym ent Wednesday figures, latest shown are for October 22. Nonagricultural employment increased by 450,000 persons in September, and was at the record level of 43 million, according to Bureau of Labor Statistics figures. The in crease largely reflected seasonal gains in nondurable goods manufacturing and trade, and in the number of school employees of state and local governments. C o n s t r u c t io n The value of new construction activity on projects under way, as estimated by the Departments of Commerce and Labor, increased somewhat further in September. W ork was started on 88,000 new dwelling units in September, an increase of 2,300 from August, and work was completed on 77,000 units. The value of construction contracts awarded, as reported by the F. W . Dodge Corporation, declined in September following a sharp increase in August, and was at about the level of other recent months. Declines occurred in most lines, but the greatest reduction took place in public utilities, which had increased most markedly in August. LOANS AT MEMBER BANKS IN LEADING CITIES D is t r ib u t io n Excludes loans to banks. Wednesday figures, latest shown are for October 15. Department store sales increased by more than the usual amount in September, owing in part to the advent of cooler shopping weather and the expenditure of proceeds from redemption of terminal leave bonds. Sales at other retail stores also increased, reflecting chiefly higher prices for foods and a larger volume of purchases of durable goods. In the early part of October department store sales declined considerably from the high rate reached at the end of September. Shipments of railroad revenue freight continued to advance in September and the early part of October. The usual large seasonal rise in loadings of miscellaneous freight and further gains in coal shipments accounted for most of the increase. C o m m o d it y P r ic e s CONSUMERS’ PRICES J r vV h fc .J » CLOTHING..i A \j i '✓F O O D / A 1939 1940 1941 T \J B a n k C r e d it '■'a l l i t EMS \/y*~ RENT 1942 1943 1944 1945 1946 1947 Bureau of Labor Statistics indexes. “ A ll items” includes house furnishings, fuel, and miscella neous groups not shown separately. Mid-month figures, latest shown for “ All items” and ^F ood” are August; for “ Clothing” and “ Rent” , July. The general level of wholesale commodity prices in the middle of October was at the advanced level reached in the middle of September. Prices of wheat and some other farm products and foods reached new high levels. Prices of butter, corn, and meats, however, declined, following earlier sharp increases. Wholesale prices of most groups of indus trial commodities continued to show advances in the early part of October. Retail prices rose further by about one percent from July to August, with the largest increases shown in prices of foods and fuels. Further marked advances in retail food prices have occurred since August. Commercial and industrial loans at banks in leading cities continued to increase sub stantially during September and the first half of October. Real estate and consumer loans also showed further growth. Holdings of Government securities declined some what, reflecting Treasury retirement of bonds maturing on October 15. Additions to monetary gold stock continued to supply reserve funds to banks. Treasury balances at Reserve Banks, which were expanded considerably in late September as a result of large quarterly tax receipts, declined in October. The effects of these fluctua tions on the Reserve positions of banks were offset by changes in Federal Reserve hold ings of Government securities, which increased in the latter part of September and declined during the first three weeks of October.
@FedFRASER