The border vidette., 1931-02-07
BUSINESS DEPRESSION IN 18TH
FEDERAL RESERVE DIST.

Reserve District during the past
year. AS in other parts of the
world the extremely sharp de.
cline in production and distribu
ton have been similar in maRni
tude to those of the 1920-192l
depression and the decrease in
prices has been the greatest
since that time. Crop produc
ton increased substantially dur
Jog 1880 as compared with 1929,
but large declines in farm oro
ducts prices occurred and re
turns to most producers were
unusually small. Activity in the
Districts leading industries SUI
fered marked reduction from
the high levels Of 1929, produc
ton in most industries receding
to levels below those of 1924
There were, however, increases
ia the output of The fruit and
vegetable canning and packiag
and meat packing Industries
There was considera0 0e decline
Ia the, value of commodities sold
a. retail aud an even greater de.
cline in wholesale sales. Trans.
portation Of freight on railroads
and through Pacific Coast ports
(both foreign and intercoastai)
was in smaller volume than 10
1929.
The decline in business activ
ity was less pronounced in De
cember than in most months of
1880. A few individual fields Of
industry showed Improvement,
although the general tendency
was still downward. Little other
than seasonal changes in the
trade situation were recorded
during the month Continued
sharp declines in both wholesale
and retail commodity prices fur
thur reduced price averages dur
log December and early January
Excepting some damage to
citrus crops in California by un
usually low temperatures, recent
weather conditions have been
favorable to the growth of crops
already sown and to the pros
poets for those to De planted in
the spring. The large acreage
sown to wheat in the autumn of
1880 is in excellent condition.
Ranges and livestock have been
benefited by the recent rains.
Declines ia the petroleum and
petroleum products, copper, ce;
ment, and engineering construc
tion industries reduced total out
put, although the aggregate
decline was moderated by q
smaller than seasonal decrease
in numbering and q pronounced
increase in building activity
other than engineering construc
tion. During recent months, and
especially in December, the con.
tinued curtailmept of production
that has been evident in the lum.
Der and copper mining industries
for the past year has begun to
effect reductions in inventories
of those commodities.
Easy money condition prevail
ed in the Twelfth District thruout
1880, q reflection of the lack of
demand for commercial credit
which usually accompanies bust
ness depression. During the
first half of the year short term
interest rates declined abruptly,
then a more moderate decline set
in which lasted until the end of
October. since when there has
been little change in rates. After
the first few weeks of 1880 the
difference between interest rates
in the Twelfth District aud east
ern money markets made this
District attractive to funds
seeking employm ment, and during
the first ten months there was q
substantial net inflow Of funds to
San Francisco. These funds,
which were chiefly bankers bal
ances available for the most part
on day to day basis onlv, to
gether with an excess of Uoited
States Treasury expenditures
over collections aud reduction
of 30 million dollars in the aver
age amount of currency in cir
culation during the year enabled
city banks to satisfy demands
made upon them for commsr
cial credit, to increase slightly
their loans on securities, and to
build up their investment port
folios, while their borrowings
from the reserve bank we're
negligible in amount. During
December, however, expansion
of currency circulation and
s0nn unnasinass doa to bank