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x-4gs2 F % D ^ R A I H 1! S ^ R T 1 3 0 9 BOARD STATEMENT FOR TIF' PRESS For r e l e a s e in morning papers, Friday, October 28, 1927. The f o l l o w i n g i s a summary of general b u s i n e s s and f i n a n c i a l c o n d i t i o n s throughout the s e v e r a l Federal Reserve D i s t r i c t s , based upon s t a t i s t i c s f o r the months of September and October, as contained i n the forthcoming i s s u e of the Federal Reserve B u l l e t i n . I n d u s t r i a l and trade a c t i v i t y i n c r e a s e d l e s s i n September than i s usual at t h i s season of the year and continued to be i n s m a l l e r volume than a year ago. The g e n e r a l l e v e l of wholesale commodity p r i c e s showed a f u r t h e r r i s e , r e f l e c t i n g c h i e f l y p r i c e advances f o r a g r i c u l t u r a l commodities. Production. The Federal Reserve Board's indexes of both manufacturing and mineral production, i n which allowance i s made f o r usual s e a s o n a l v a r i a t i o n s , d e creased between August and September. Production of i r o n and s t e e l was i n smaller volume i n September than i n any month s i n c e 1925 • There were a l s o d e c r e a s e s from August to September in the output of nonferrous m e t a l s , automobiles, and rubber t i r e s , w h i l e t h e . t e x t i l e and shoe and l e a t h e r i n d u s t r i e s continued a c t i v e . The production of bituminous coal showed about the usual s e a s o n a l i n c r e a s e i n September and October, but continued i n smaller volume than during the same p e r i o d of other r e c e n t y e a r s . The o u t - put of a n t h r a c i t e was c o n s i d e r a b l y reduced during September and the f i r s t h a l f of October, f o l l o w i n g an i n c r e a s e i n August, and the weekly output of crude petroleum has decreased s l i g h t l y s i n c e the e a r l y part of August. The v a l u e of b u i l d i n g c o n t r a c t s awarded continued somewhat s m a l l e r during September and t h e f i r s t t h r e e weeks of October than during the correspondi n g p e r i o d of 1925 or 1926; d e c l i n e s occurred i n c o n t r a c t s f o r r e s i d e n t i ' commercial, i n d u s t r i a l , and educational b u i l d i n g s , while c o n t r a c t s f o r put- , X-U9S2 .2. 310 l i e works and p u b l i c u t i l i t i e s were l a r g e r i n September than i n the corre ponding month of any p r e v i o u s y e a r . Crop c o n d i t i o n s improved i n September and t h e Department of A g r i c u l grain t u r e ' s e s t i m a t e s f o r October 1 i n d i c a t e l a r g e r y e i l d s of most/ crops than was were expected a month e a r l i e r . The e s t i m a t e f o r the corn crop/ i n c r e a s e d by 1 4 6 , 0 0 0 , 0 0 0 b u s h e l s and was only 4 3 , 0 0 0 , 0 0 0 b u s h e l s s m a l l e r than the y i e l d i n 1926. Wheat production i s expected to be 000,000 bushels l a r - ger than l a s t year, w h i l e the estimated c o t t o n crop of 1 2 , 6 7 8 , 0 0 0 b a l e s i s more than 5 , 0 0 0 , 0 0 0 b a l e s below l a s t y e a r ' s y i e l d . Distribution. Trade of w h o l e s a l e and r e t a i l firms i n c r e a s e d i n September by somewhat l e s s than the usual seasonal amount. Compared w i t h a year ago, s a l e s of w h o l e s a l e firms i n n e a r l y a l l l i n e s , except shoes and drugs, were smaller. S a l e s of department s t o r e s were i n about the same volume, and those of mail order houses and chain s t o r e s were somewhat l a r g e r . Inven- t o r i e s of merchandise c a r r i e d by r e p o r t i n g wholesale f i r m s i n l e a d i n g l i n e s were reduced i n September and continued smaller than l a s t y e a r . Stocks of department s t o r e s , on the other hand, i n c r e a s e d s l i g h t l y more than i s u s u a l i n September and at the end of the month were somewhat l a r ger than a year ago. Fr e i g ht car l o a d i n g s were i n smaller volume during September and the f i r s t week of October than i n the corresponding p e r i o d of l a s t year f o r a l l groups of commodities, except g r a i n and g r a i n products, of which l o a d ings were l a r g e r than in the same period of any p r e v i o u s year s i n c e 1924. Prices. • Wholesale commodity p r i c e s advanced i n September f o r the f o u r t h cons e c u t i v e month, and the Bureau of Labor S t a t i s t i c s a l l - c o m m o d i t i e s index x-U982 .flj 1 -3r o s e t o t h e h i g h e s t l e v e l s i n c e l a s t January. There were l a r g e increase:: "between August and September i n the p r i c e s o f . l i v e s t o c k , meats, and c o t t , , and small advances i n t h e p r i c e s of l e a t h e r , c o a l , and c h e m i c a l s , w h i l e p r i c e s of g r a i n s , "building m a t e r i a l s , and rubber d e c l i n e d . During t h e f i r s t t h r e e weeks i n October the p r i c e s of s p r i n g wheat, corn, c o t t o n , c o a l , and i r o n and s t e e l d e c l i n e d , w h i l e p r i c e s of l i v e s t o c k , raw wool, and rubber advanced. Bank C r e d i t . T o t a l l o a n s and i n v e s t m e n t s of member banks i n l e a d i n g c i t i e s showed a f u r t h e r i n c r e a s e f o r the f o u r weeks ending October 19 and on that d a t e were about $ 6 6 0 , 0 0 0 , 0 0 0 l a r g e r than i n mid-summer. Of t h i s growth i n mem- ber bank c r e d i t about $3^5,000,000 r e p r e s e n t e d an i n c r e a s e i n commercial l o a n s , a c o n s i d e r a b l y s m a l l e r i n c r e a s e than f o r the same p e r i o d l a s t y e a r , and about $335»000,000 an i n c r e a s e i n investments and l o a n s on s e c u r i t i e s . At t h e r e s e r v e banks t o t a l b i l l s and s e c u r i t i e s i n c r e a s e d during t h e f o u r weeks ending October 19, as i s u s u a l a t t h i s s e a s o n , but were on the average about $ 6 0 , 0 0 0 , 0 0 0 below the l e v e l of the corresponding p e r i o d l a s t year. The i n c r e a s e , which was l a r g e l y i n the form of a d d i t i o n s t o the banks' h o l d i n g s of a c c e p t a n c e s , r e f l e c t e d c h i e f l y an i n c r e a s e i n member bank r e s e r v e requirements and an export demand f o r g o l d . Some s e a s o n a l f i r m n e s s i n the money market i n October was r e f l e c t e d i n an i n c r e a s e from 3 l / 8 to 3 l / U per c e n t i n r a t e s on 90-day bankers' acceptances. The r a t e on commercial paper remained unchanged at 4 p e r cent
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