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X-4429 174 F E D E R A L R E S E R V E B O A R D STATEMENT FOR THE PRESS For Release in Morning Papers, Monday, September 28, 1925. The following is a summary of general business and financial conditions throughout the several Federal Reserve Districts, based upon statistics for the months of August and September, as contained in thv forthcoming issue of the Federal Reserve Bulla tin. Production of basic commodities declined in August to the lowest level of the year but was considerably higher than during the summer of 1924. Distri- bution of goods at wholesale and retail continued in greater volume than a year ago. Seasonal growth in the demand for credit, arising partly from financing of the crop movement, was reflected in an increase in the volume of commercial borrowing. Production:- The Federal Reserve Board's index of production in basic industries, which is adjusted for seasonal variations, declined 4 per cent in August, but was 15 per cent higher than a year ago. Output of steel and of bituminous and anthracite coal and activity in the woolen industry increased in August, while mill consumption of cotton and the production of flour and lumber decreased. Employment and earnings of factory workers were larger in August than in July, but continued smaller than in June. Building contracts awarded during August, owing chiefly to large awards in New York, exceeded all previous records. Crop reports of the Department of Agriculture at the beginning of September, ad compared with forecasts a month earlier, indicated somewhat larger yields of spring wheat, oats, barley, hay, and tobacco, and smaller yields of corn and potatoes. The mid-September cotton crop estimate was 13,931,000 bales compared with a forecast of 13,740,000 bales on September 1. Trade:- Wholesale trade was 5 per cent larger in August than in July owing to - 2 - X-4429 175 seasonal increases in the sales of dry goods and shoes, and sales of all lines except groceries were greater than those in August, 1924. Sales at department stores and at mail order houses showed less than the usual increases in August hut continued in greater volume than last year. Stocks of merchandise at depart- ment stores increased in August and for the first time this year were considerably larger than in the corresponding nonth a year ago. Wholesale firms in all leading lines except drugs and hardware reported smaller stocks on August 31 than a month earlier. Total freight car loadings were larger during August than in any month since last October. Coal shipments, preceding the anthracite strike, were especially heavy, ' less -than-carload-lot shipments continued to increase, and the movements of livestock and grains were seasonally greater than in July, although smaller than in August, 1924. Prices:- Wholesale prices showed a further slight advance in August and were near the high level reached in the spring of this year. Prices of agricultural commodities, which in recent months have been above the average for all commodities, increased further, while prices of other commodities declined slightly. Between the end of August and the latter part of September prices of bituminous coal, pig iron, rubber and cotton advanced, and prices of spring wheat, corn, raw sugar and wool declined. Bank Credit:- At member banks in leading cities loans chiefly for commercial and agricultural purposes showed further seasonal increases during the first half of September and at the middle of the month were about $275,000,000 higher than at the end of July. Investment holdings remained in about the same volume as dur- ing previous months, but loans on securities increased and on September 16 were near the highest level of the year. X-4429 1 7 6 A further growth in the total of reserve bank credit in use occurred during the five week period ending September 23. Member tank borrowings increased in the early part of September, and after a temporary decline during the period of Treasury financing, increased to a larger total than at any tire since the beginning of 1524. The seasonal growth in the demand for currency during August was reflected in an increase of $65,00C,0C0 in total money in circulation. Money rates showed a firmer tendency during the last week of August ana the first, throe weeks of September. The prevailing rate on prime commer- cial paper remained at 4 1/4 per cent but there was an increased proportion of sales at 4 \j2 per cent.
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