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....... X-4641 FEDE~AL RESERVE 37 BOARD STATEMEN'T FOR THE PRESS For Release in Morning Papers, Wednesday, July 28, 1926. The following is a summary of general b1siness and financial conditions th'roughout the several Federal reserve districts, based upon statistics for the months of June and July, as contained in the forthcoming issue of the Federal Reserve Bulletin. Industrial activity was at the same level in June as in May, and was slightly above the level of a year ago4 The average of cominodity prices ad- vanced further between May and June. Produc~ion. - The Federal Reserve Board 1 s index of production in basic industries remained unchanged in June. Prod~tion of iron and steel and activity of woolen machinery continued to decline, and there were also reductions in the output of copper, zinc, and yetroleum, while cotton consumption, the products, and the·output of coal and cement increased. manufactur~ of food Production of automobiles was smaller in June than in May and for the first time this year was less than in the corresponding month of 1925. Declines took place in June in employment and·pay rolls of all textile industries, except woolen and worsted goods and men's clothi~tg, since 1924. and some of these industries were less active than at any time ~~ilding contracts awarded during June ware slightly less than in / !.fay and for the first time since early in 1925 were smaller than in the correspending month of the preceding year. 'Crop reports issued by the Department of Agriculture indicated a slight improvement during June. The co~osi te ·condition of all crops on July 1 was reported at 6.4 per cent. below the average July condition during the last X-4641 -2- ten years. '.''8 dt. The production of winter wheat was est~ted at 568,000,000, or 172,000,000 more than in 1925, and that of spring wheat at 200,000,000, or 71,000,000 less than last year. A production of 2,661,000,000 ml~hels of corn, or 8.3 per cent less than last year, is indicated in the same report. Cotton production, on the basis of July 16 condition, was estiue.ted at 15,368,000 bales, or 7+8,000 bales less tl1an the production of last year. Total volume of wholesale and :retail trace in Ju."'ie was larger than for the same month in 1925. Dep9-rtment store sales decUned seasonally in June, a.nd wholesale t:tade in all leading lines, exce:pt groceries, also decrea3ed during the month. Sales of mail order houses increased mor0 than usual in June, and were 5 per cent larger than in June, 1925. Stocks of merchandise carried by wholesale firms at the end of June were smaller than a year earlier. Depart- ment stores continued to reduce their stocks, and their inventories, which had been considerably above last year 1 s level earlier in the year, were at the end of ~xne only about 1 per cent larger than a year ago. Freight car loadings showed seasonal increases during June and continued through the first half of July at higher levels than in previous years. Loadings of grains in the south- western states have been particularly large. Prices.The general level of wholesale prices, according to the index of the Bureau of Labor Statistics, i!X!reased from May to June by less than half of one per cent. Prices of livestock and meats advanced, and there were small increases for silk, petroleum products, nonferrous metals, and c..l-J.emicals and drugs. Price· decreases occurred in grains, cotton, textiles, building materials, and house furnishings. In the first two weeks of July prices of grains, flour, cotton, '}0 t_)-.7 X-4641 -3- \Vool, and hides ir;.creased, while bo£:e of eattle, £wgs, silk, and rubber declined. Bank Credit. Loans and inves tr1ents of mem1)er banks in leading cities at the end of June were in larger volw'1le than at any previous time, and after declining during be first hal: of July wora still $900,000,000 above the level of a year ago. Of this increase abo1."Lt $385,000,000 was in loans on securities, $340,000,000 in COII1'Ilercial loans, and $175,000,000 in investrnents. Since t~1e beginning of 1926 an increase in commercial loans together with the growth of i:wcstments has more than offset the reduction in loans on securities. The demand for credit at the end of the fiscal year and the increased currency requirements over the holiday were reflected in a growth of member b~>k borrowing at the reserve b~nks ffi1d on July 7 total discounts were· near the bighest j)OL1t of the year. With the retur:1 flow of currency from c~rculation after the holiday, discounts declineci, and o:1 July 21 vrere in about the same volu:ne as in the last half of June. The reserve banks 1 holdings of acce)tances and of United States securities changed little duri!¥; the period, and tee total volume of reserve bank credit outstandi:1g i~ tbc third week of July was close to the June level. Money market conditions were firmer in July a.s indicated chiefly by i~creases in rates on call a::1d time security loans. on commercial paper were also slightly higher. Rates on acceptances and
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