| Show Bus Business ness Conditions of the Twelfth Federal Reserve District By Isaac B Newton Chairman of the Board and Federal Reserve Agent Federal Reserve Bank of San Francisco In the Twelfth fed federal ral reserve district the y year yar ar 1926 Was char char- characterized characterized characterized by a a largo volume ot of output full employ employ- employment ment moot ot of o workers era a 0 record volume ot oe trade trado at retail u a sub volume of ot traio tra a at wholesale le and business which In the tho aggregate Wol w win ss probably bly greater than In any year Volume of ot tarns crop crops produced In the district was larger In 1926 than In any other oll year of ot rec- rec record rec record ord except 1923 Large I-arge yields offset only partially a a reduction In prices 1111 petit paid 1 for agricultural products however end nd nil financial returns to farmers Camers wore were smaller than ban In 1925 The supply of or bank credit avail avail- available available able during 1926 was adequate for Cor Corthe forthe the districts district's needs Interest rates CorI I remained at moderato moll crate lev levels Icv- Icv els ll is and demands demand upon the fed federal ted fed federal eral er l reserve bank of San Sail Fran Fran- Francisco Francisco cisco not nt unduly heavy l Signs of at o recession In Industrial and ond trade activity appeared dur- dur during Ini dur-Ini ing the tha latter part of at 1926 1826 rho y year ar 1926 clo closed ed with industrial activity and volume of at employ employ- employment employment ment at levels slightly below those of December 1925 with distri distribution button at ot wholesale at moderate moderate- moderately ly Iy low levels and with retail etal trade active but hut apparently car car- carrying carrying larger Inventories 11 than at any thue alne the tho spring ot of 1924 Banking and credit con con- con conditions continued sound Hound GAINS G M AIE Building construction agaIn contributed largely to J prevailing Industrial durin during 1926 al- al although al although though figures of at o number and of at building permits Issued In 20 principal of the sq kok worn temper than In any ya ai i e a is- is isA 1 A record ohl 1 I I Ilear lumber v w ill t it d dune 0 1 n fir year lear r-r r r f r U tl ln n s a t sonar curtailment ent during recent months resulted d In a December 1926 cut which wai was less lets than that of December 1923 1925 Output of flour lour In tha tita district was larg larg- larger larger larger er during 1926 than In 1925 1923 but excepting that year was WIlS smaller than In any auy year sine sine- 1920 The canned fruit anal in l vegetable pack In California amounted I 1 to 30 30 cases In 1926 the tho tho larg largest est eat pack ot of record A revision of at canned fruit prices was an- an announced an announced by ut an important factor In the tho trade on January 3 19 1927 7 The new quotations which are guaranteed t fc frost decline G until Juno 1 I 1927 and which contain other othel to buyers are aro generally lower than the opening prices named in July 1926 The modera o decline in trade ActIvity was reported dur dur- during during ing log the altar lattur part of or 1926 w was checked at toast temporarily byan by bynn byan nn an active holiday season in De- De December De December cember Sales at wholesale In- In increased in increased creased by more than the tho usual seasonal amount and were ap approximately proximately aqua In value to sales during 1326 1925 This fact acquires significance when It ft ItIs ItIs Is that I 1 the he general wholesale le price pricy was 6 per percent percent cent lower loner during December 1926 1920 than doling 1925 1915 This 1 tanks tank's anks ank's Index ot of o sales at retail In which V allowance I is nitro for Cor usual u inal lual seasonal varia varla- variation lion tion again advanced cd during De- De December December De December cember 1926 and its Index ot of otI I daily average bank debits which Is also adjusted for tor tl I sea sea- seasonal Ba a movements d 1 for tho first time lima since Ince ince last Iut July CREDIT rr CHANGES 3 During It rec t t I talo o 0 l Ti r 1 porting ni 11 nr h I r hal hinl- hinl In Ill the n th 11 pi 1111 III t Of or Irr Ing I I T ri I I I I I i I 1 t I r s diah tr h b r il it rf I I il l 1 li 11 11 n up holiday and year end end ear changes In demand tor for credit accommodation accommodation tion Prior 10 to tho the Christmas holidays holi- holi holidays holi holidays days demand for credit and cur cur- currency currency cur currency rency increased and interest rates advanced nd With tire the pass pass- passIng passing passing ing of the year and this seasonal demand ceas consad l and by mid Jan the tho volume ot of total loans and discounts of ot these banks had declined to December 1 levels Member ba bask baik demands for funds at t the e reserve bank ot of San FI Increased tem tem- temporarily Dee December tuber but neither Christmas nor at atthe atthe the year end l were so great as IlS tho-io tho experienced dur dur- durIng during ing hag tho autumn hart hanest hartest est seaSOn On January 12 1927 total bills and securities held by the reserve bank fire in million dollars larger In amount then than n ope o one year car ago Tho The increase In hand to hand currency requirements during durin the month preceding Christmas resulted In a temporary temporary ary my expansion of ot our four million dol- dol dollars dollars dol dollars lars In reserve note noto cir clr cir I of ot tills hang banK and a n de- de decline decline dc-clino dc cline ot of approximately 25 million dollus in its ill Il ras lall cash Sub Subsequent Sub Sub- Subsequent sequent contraction In currency demands the t c previouS expansion and an I the volume o of fed federal fed fed- federal eral reserve notes In circulation declined to to Gen l lowest lot lo t level leyel sino since September IS 19 J vWe wh e reserves again 1 Preliminary v estimates tes ot of the tho United States States department of at agri- agri agriculture agriculture agri agriculture culture indicate that the acreage ot of winter wheat planted in the district durl during the the autumn ot of 1936 1929 1926 was 13 jer er cent larger larser than that planted dur- dur durIng during durIng Ing the autumn of ot 1125 favor Favor- Favorable favorable able weather In a senor gener generous OilS ous seasonal has mark marked 1 the tho beginning of o the 1927 urn urn- agri agricultural cultural season over o most ot of the lh Twelfth federal reserve e district d A moderately heavy heay snowfall no iu to mountain areas of o the olves Ives promise of at an adequate sup sup- supply sup supply ply ot of w for agricultural pun pur- pur po e t l 1 r In the s son season |
