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F E D E R A L E I S 1 E T B O A R D „ -

STATEMENT FOR THE PRESS

F o r

r e l e a s e

i n

Morning Pa pe rs ,

Monday, August 2 7 , 1 9 2 8 .

T he f o l l o w i n g i s a summary o f g e n e r a l

b u s i n e s s a n d f i n a n c i a l c o n d i t i o n s

th roughout t h e seve ra l Fede ra l Rese rve

D i s t r i c t s , " based u p on s t a t i s t i c s f o r

t h e months o f J u l y a n d August , a s w i l l

appea r

i n t h e

f o r t h c o m in g i s s u e

o f t h e

F e d e r a l R e s e r v e B u l l e t i n

a n d t h e

monthly

r e p o r t s o f t h e F e d e r a l r e s e r v e h a n k s .

I n d u s t r i a l

a n d

t r a d e a c t i v i t y

w a s i n

la rger volume

i n

J u ly t h a n

i s

usua l

i n midsummer a n d t h e g e n e r a l l e v e l o f commodi ty p r ic e s advanced s l i g h t l y . Mem-

b e r h a n k h o ld in g s o f s e c u r i t i e s a n d l o a n s o n s e c u r i t i e s de c l i n ed i n J u l y an d

August , whi le

a l l

o th e r l o a n s i n c r e a s e d

t o t h e

h i g h e s t l e v e l

o n

re co rd . Condi-

t i o n s i n t h e money market rema ined f i rm .

P r o d u c t i o n — P r o d u c t i o n o f m a n u f a c t u r e s a n d minera ls showed a s m a l l e r d e -

c r e a s e t h a n u s u a l

i n

J u l y ,

a n d t h e

index

o f

in du s t r i a l ' p r od uc t ion , which makes

a l lowance f o r s e a s o n a l v a r i a t i o n s , a d v an c e d. P r o d u c t i o n o f s t e e l , b i t u m in o u s

c o a l , p e t r o l e u m , a u to m o b i l e s ,

a n d

foo twea r

w a s

l a r g e r

i n

Ju ly than

i n

June , whi le

a c t i v i t y i n t e x t i l e m i l l s , m ea t p a c k i ng , a n d coppe r a n d a n th r a c i t e m in e s d e c l i n e d .

Lumber pr od uc ti on showed l e s s t han t h e u s u a l s e a s o n a l d e c r e a s e . S t e e l m i l l a c t i v -

i t y ,

w h i l e d u r in g J u ly

w a s a t a n

u n u s u a l l y h i g h l e v e l

f o r t h e

summer season,

w as

wel l ma in ta i ned dur ing Augus t . Weekly re po r t s f rom De t r o i t f a c t o r i e s show a

la rger volume o f employment i n t h e m id d l e o f August than a t a n y p r e v io u s d a t e ,

i n d i c a t i n g t h a t a u to m o b i l e p r o d u c t i o n c o n t i n u e d l a r g e

i n

t ha t month. Bu i l di ng

c o n t r a c t s a w a r d e d d e c l i n e d b y somewhat more than t h e usua l seasona l amount i n

J u l y , b u t we re l a rge r than i n a n y p r e v i o u s J u l y , t h e in c r ea se ove r l a s t yea r

b e i n g c h i e f l y i n r e s i d e n t i a l b u i l d i n g . Con t ra c t s awarded i n t h e f i r s t two

weeks

i n

August we re s l i g h t l y sma l le r than

i n t h e

same pe r i od

o f

l a s t y e a r .

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- 2 - X-6119

, i - -

, w

• E s t i m a t e s o f t h e Department o f A g r i c u l t u r e a s o f August 1 i n d i c a t e c o n s i d e r a b l e

improvement i n c rop con d i t ion s du r ing Ju ly . Es t ima te d whea t p rod uc t ion w as

8 9 1 ,00 0 ,0 00 b u s h e l s , l a r g e r

b y

91 ,000 ,000 than on , J u l y

1 a n d

s l i g h t l y l a r g e r

than t h e y i e l d i n 1 9 2 7 . T h e corn crop i s e x p e c t e d t o b e more than 3,000,000,000

b u s h e l s ,

a n

i n c r e a s e

o f

750 ,000 ,000 bus he l s f rom l a s t yea r . Fo r ec as t s

f o r

o ther

g ra in c rops were a l s o l a rg e r t han t h e J u l y 1 e s t i m a t e s a n d i n most cases exceeded

l a s t y e a r ' s y i e l d s .

T h e

August

1

f o r e c a s t

o f

c o t t o n p r o d u c t i o n

w a s

14 ,290,000,

a s compared wi t h y ie ld s o f 12 ,955 ,000 ba le s i n 1927 and nea r ly 18 ,000 ,000 ba les

i n 1 9 2 6 .

T r a d e — D i s t r i b u t i o n

o f

commodit ies

a t

w h o l e s a l e

a n d

r e t a i l

w a s i n

l a r g e

volume i n J u l y . S a l e s o f d r y goods a n d shoes a t who le sa l e were l a rg e r t han i n

J u n e ,

a n d

t h o s e

o f

o th e r l i n e s were on l y s l i g h t l y sma l l e r . Depar tment s t o r e

s a l e s , a f t e r a l l ow a n ce f o r season a l changes , i nc rea sed i n J u l y . Compared wi th

J u l y

a

y e a r

a g o

t r a d e

o f

b o th who les a l e

a n d

r e t a i l f i r m s

wae -

l a r g e r . S t oc k s

o f

o f

depar tmen t s t o r es and /who les a l e f i rm s con t inu ed smal l e r t ha na yea r a g o .

F r e i g h t - c a r l o a d i n g s i n c r e a s e d

b y

more than

t h e

usual seasonal amount

i n

J u l y a n d

o

t h e f i r s t t ime th i s yea r were l a rg e r t han i n t h e co r r espond ing

month

o f 1 9 2 7 .

In c r ea se s , compared wi t h l a s t yea r , were r e po r t ed

i n

load ings

o f misce l l aneous commodi t i e s a n d o f g r a in , r e f l e c t i n g t h e e a r l y h a r v e s t i n g o f

t h e

c r o p t h i s y e a r .

T h e

l a r g e s t d e c r e a s e ,

a s

compared wi t h

a

yea r

a g o , w a s i n

l i ve s t oc k sh ipmen t s . During t h e f i r s t tw o weeks i n Augus t, t o t a l l oa d in gs were

i n

about

t h e

same volume

a s i n t h e

c or r esp ond ing weeks

o f

l a s t y e a r .

P r i c e s — T h e g e n e r a l l e v e l o f who les a l e commodi ty p r i c e s inc rea se d s l ig h t l y

i n J u l y r e f l e c t i n g c h i e f l y a dv an ce s i n t h e p r i c e s o f l i v e s t o c k a n d mea ts , a l tho ugh

th e r e were a l so smal l i nc re as es i n h i d e a n d l e a t h e r p r o d u c t s , t e x t i l e s , p e t ro l e um

p r o d u c t s , a n d b u i l d i n g m a t e r i a l s . T he re w as a s h a r p d e c l i n e i n t h e p r i c e o f

gra ins , o the r t han co rn ,

a n d

some decrease

i n

chemica l s

a n d

d r u g s , s i l k , r u b b e r ,

a n d a u t o m ob i l e t i r e s . D a ri n g t h e f i r s t h a l f o f August there were increases i n

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4 *

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t h e p r i c e s o f sugar , hogs a n d po rk p ro duc t s , coke , a n d lumber, a n d d e c r e a s e s i n

gr a i ns , co t to n , woo l

a n d

h i d e s .

Bank Credit—Between July 1 8 an d August 1 5 t o t a l lo a n s a n d i n v e s t m e n t s o f

member banks i n l e a d i n g c i t i e s d e c re a s e d b y about $130,000,000 . This dec l i ne r e -

f l e c t e d a c o n s i d e r a b l e r e d u c t i o n i n i n v e s t m e n t s , c h i e f l y a t banks in Hew York

C i t y ,

a n d

some fu r t h e r dec l in e

i n

loans

o n

s e c u r i t i e s .

A l l

other loans, which

inc lude loans

f o r

commercial pu rp os es , showed

a

smal l seasona l i nc rease

a n d a t

t h e middle o f August were i n t h e l a rges t vo lume s ince ea r ly i n 1 9 2 1 a n d n e a r l y

$230,000,000 larger than

a t t h e

autumn peak

o f

l a s t yea r . There -was-a fu r th e r - ' l a rg e

d e c l i n e i n n e t demand de po si t s , a n d p r a c t i c a l l y n o change i n t ime depos i t s .

Volume o f re se rv e bank cr ed i t ou ts ta nd in g showed l i t t l e change between Ju ly

2 5 a n d August 2 2 . Di scoun t s a n d a c ce p t a n c e h o l d i n g s i n c r e a s e d s l i g h t l y w h i l e

Uni t ed S t a t e s se cu r i ty ho ld i ngs were p r a c t i c a l l y unchanged . Inc rea sed demand

f o r

cur rency, which

i s

u s u a l

a t

th is t ime

o f t h e

y e a r ,

h a s n o t

r e s u l t e d

in an

equ iva len t g rowth i n r e s e r v e b a n k c r e d i t , b e c a u s e i t w a s o f f s e t i n p a r t by a

d e c l i n e i n r e s e r v e s r e q u i r e d b y member banks, which ref lec ted t h e d e c r e a s e i n

t h e i r d e p o s i t s .

There were f u r t h e r inc re as es between

t h e

midd le

o f

J u l y

a n d t h e

midd le

o f

August i n open-marke t r a t e s o n co l l a t e r a l l oan s , commerc ia l paper a n d banker s '

accep tances .