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X-6049 FEDERAL B E S E E V E BOARD STATEMENT FOR THE PRESS For r e l e a s e i n Morning P a p e r s , Monday, May 28, 1928. The f o l l o w i n g i s a summary of g e n e r a l "business 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 F e d e r a l 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 A p r i l and May, a s contained i n the forthcoming i s s u e of the F e d e r a l Reserve B u l l e t i n . Volume of i n d u s t r i a l p r o d u c t i o n c o r t i n u e d l a r g e during A p r i l , r e f l e c t i n g c h i e f l y i n c r e a s e d o u t p u t i n metal i n d u s t r i e s , w h i l e a c t i v i t y i n i n d u s t r i e s p r o d u c i n g food and c l o t h i n g d e c r e a s e d . declined. Wholesale and r e t a i l t r a d e a l s o The g e n e r a l l e v e l of w h o l e s a l e commodity p r i c e s i n c r e a s e d i n A p r i l r e f l e c t i n g advances i n farm p r o d u c t s . There were l a r g e e x p o r t s of g o l d i n A p r i l and May, member bank l o a n s and t h e i r borrowings a t the r e s e r v e banks continued to i n c r e a s e , and money r a t e s showed f u r t h e r a d v a n c e s . P r o d u c t i o n — P r o d u c t i o n of manufactures remained i n about the same volume i n A p r i l as i n March, while o u t p u t of m i n e r a l s d e c l i n e d s l i g h t l y , owing c h i e f l y to a d e c r e a s e i n p r o d u c t i o n of bituminous c o a l . D a i l y average o u t p u t of i r o n and s t e e l , copper, and z i n c , i n c r e a s e d i n A p r i l , b u t s i n c e the f i r s t of May t h e r e has been some c u r t a i l m e n t i n s t e e l - m i l l a c t i v i t y . Automobile p r o d u c t i o n was maintained i n l a r g e volume d u r i n g A p r i l and a c cording to p r e l i m i n a r y r e p o r t s a l s o d u r i n g the f i r s t h a l f of May. Textile m i l l a c t i v i t y , o u t p u t of boots and s h o e s , and meat p r o d u c t i o n showed subs t a n t i a l declines during April. Volume of f a c t o r y employment d e c l i n e d 1-6049 - 2 - s l i g h t l y , r e f l e c t i n g c h i e f l y d e c r e a s e s i n the f o o d , l e a t h e r , and t e x t i l e industries. B u i l d i n g c o n t r a c t s awarded i n A p r i l exceeded t h o s e f o r any p r e v i o u s month, and awards during the f i r s t t h r e e weeks of May continued i n u n u s u a l l y l a r g e volume• Trade—Sales "by department s t o r e s and "by w h o l e s a l e f i r m s i n most l i n e s of t r a d e d e c l i n e d i n A p r i l and were i n s m a l l e r volume than a year ago. Average d a i l y s a l e s of department s t o r e s , a f t e r allowance i s made f o r the e a r l i e r d a t e of E a s t e r and the u s u a l s e a s o n a l changes, were s m a l l e r i n A p r i l than i n March and were a l s o s m a l l e r than i n A p r i l a y e a r ago. This d e c r e a s e was due l a r g e l y to u n f a v o r a b l e weather c o n d i t i o n s . Stocks of department s t o r e s , a f t e r a d j u s t m e n t f o r s e a s o n a l changes, were i n ah out the same volume as i n March and s l i g h t l y s m a l l e r than a y e a r ago. F r e i g h t car l o a d i n g s showed an i n c r e a s e "between the "beginning of A p r i l and the middle of May, "but continued s m a l l e r than a y e a r ago f o r most c l a s s e s of commodities. Prices—The g e n e r a l l e v e l of wholesale commodity p r i c e s , as i n d i c a t e d by the index of the Bureau of Labor S t a t i s t i c s , i n c r e a s e d from 96 p e r cent of the 1926 average i n March to 97.4 per cent i n A p r i l . This i n c r e a s e r e - f l e c t e d sharp advances i n the p r i c e s of g r a i n s , c o t t o n , l i v e s t o c k , and h i d e and l e a t h e r p r o d u c t s . Rubber p r i c e s continued to d e c l i n e , and most of the o t h e r groups of commodities showed l i t t l e change. During the f i r s t t h r e e weeks of May t h e r e were d e c r e a s e s i n the p r i c e s of g r a i n s , f l o u r , sheep, and hogs, and i n c r e a s e s i n copper, z i n c , and r u b b e r . Bank credit-—At member banks, loans l a r g e l y f o r commercial and i n d u s t r i a l p u r p o s e s , f o l l o w i n g a r a p i d i n c r e a s e d u r i n g February and March, -3- have s h o w n ' l i t t l e change s i n c e the e a r l y p a r t of A p r i l . X-S049 Loans on s e c u r i t i e s continued to i n c r e a s e and t o t a l loans and i n v e s t m e n t s of r e p o r t i n g member "banks in the middle of May were l a r g e r than a t any p r e v i o u s time. The outward movement of gold continued i n May, the d e c l i n e i n monetary gold s t o c k d u r i n g the f o u r weeks ending May 23 b e i n g n e a r l y $90.000,000• This l o s s of g o l d , t o g e t h e r with f u r t h e r s a l e s of U n i t e d S t a t e s s e c u r i t i e s by the r e s e r v e b a n k s , was r e f l e c t e d i n an i n c r e a s e of n e a r l y $140,000,000. i n member bank borrowing a t the r e s e r v e banks. There were f u r t h e r advances i n open-market money r a t e s d u r i n g May, and d i s c o u n t r a t e s a t the Federal Reserve Banks of New York, P h i l a d e l p h i a , Cleveland, A t l a n t a , and D a l l a s were r a i s e d from 4 to 4 1/2 p e r c e n t .
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