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X-6119 F E D E R A L E I S 1 E T ! BOARD „ - STATEMENT FOR THE PRESS For r e l e a s e i n Morning P a p e r s , Monday, August 2 7 , 1928. The f o l l o w i n g i s a summary of g e n e r a l 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 u p o n s t a t i s t i c s f o r t h e months of J u l y and A u g u s t , a s w i l l a p p e a r i n t h e f o r t h c o m i n g i s s u e of 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 and t h e monthly r e p o r t s of 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 was i n l a r g e r volume i n J u l y t h a n i s u s u a l i n midsummer and t h e g e n e r a l l e v e l o f commodity p r i c e s a d v a n c e d s l i g h t l y . Mem- b e r h a n k h o l d i n g s o f s e c u r i t i e s and l o a n s on s e c u r i t i e s d e c l i n e d i n J u l y and A u g u s t , w h i l e a l l o t h e r l o a n s i n c r e a s e d to t h e h i g h e s t l e v e l on r e c o r d . Condi- t i o n s i n t h e money market r e m a i n e d f i r m . P r o d u c t i o n — P r o d u c t i o n of m a n u f a c t u r e s and m i n e r a l s 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 , and t h e i n d e x of i n d u s t r i a l ' p r o d u c t i o n , which makes allowance f o r seasonal v a r i a t i o n s , advanced. P r o d u c t i o n of s t e e l , b i t u m i n o u s c o a l , p e t r o l e u m , a u t o m o b i l e s , a n d f o o t w e a r was l a r g e r i n J u l y t h a n i n J u n e , w h i l e a c t i v i t y i n t e x t i l e m i l l s , meat p a c k i n g , and c o p p e r and a n t h r a c i t e m i n e s d e c l i n e d . Lumber p r o d u c t i o n showed l e s s t h a n t h e u s u a l s e a s o n a l d e c r e a s e . Steel mill activ- i t y , w h i l e d u r i n g J u l y was a t an 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 s e a s o n , was well maintained during August. Weekly r e p o r t s f r o m D e t r o i t f a c t o r i e s show a l a r g e r volume o f employment i n t h e m i d d l e o f August t h a n a t a n y p r e v i o u s d a t e , i n d i c a t i n g t h a t a u t o 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 h a t month. Building c o n t r a c t s awarded d e c l i n e d b y somewhat more t h a n t h e u s u a l s e a s o n a l amount i n J u l y , b u t were l a r g e r t h a n i n any p r e v i o u s J u l y , t h e i n c r e a s e o v e r l a s t y e a r being c h i e f l y in r e s i d e n t i a l b u i l d i n g . C o n t r a c t s awarded i n t h e f i r s t two weeks i n August were s l i g h t l y s m a l l e r t h a n i n t h e same p e r i o d of l a s t y e a r . -2- X-6119 ,i --,w • E s t i m a t e s of t h e Department of A g r i c u l t u r e a s of 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 r o p c o n d i t i o n s d u r i n g J u l y . E s t i m a t e d wheat p r o d u c t i o n was 8 9 1 , 0 0 0 , 0 0 0 b u s h e l s , l a r g e r by 9 1 , 0 0 0 , 0 0 0 t h a n o n , J u l y 1 and s l i g h t l y l a r g e r t h a n t h e y i e l d i n 1927. The c o r n c r o p i s e x p e c t e d to be more t h a n 3 , 0 0 0 , 0 0 0 , 0 0 0 b u s h e l s , an i n c r e a s e o f 7 5 0 , 0 0 0 , 0 0 0 b u s h e l s f r o m l a s t y e a r . Forecasts for other g r a i n c r o p s w e r e a l s o l a r g e r t h a n t h e J u l y 1 e s t i m a t e s and i n most c a s e s exceeded last year's yields. The August 1 f o r e c a s t of c o t t o n p r o d u c t i o n was 1 4 , 2 9 0 , 0 0 0 , a s compared w i t h y i e l d s of 1 2 , 9 5 5 , 0 0 0 b a l e s i n 1927 and n e a r l y 1 8 , 0 0 0 , 0 0 0 b a l e s i n 1926. T r a d e — D i s t r i b u t i o n of commodities a t w h o l e s a l e and r e t a i l was i n l a r g e volume i n J u l y . S a l e s of d r y goods and s h o e s a t w h o l e s a l e were l a r g e r t h a n i n J u n e , and t h o s e o f o t h e r l i n e s were o n l y s l i g h t l y s m a l l e r . Department s t o r e s a l e s , a f t e r allowance f o r seasonal changes, increased in J u l y . Compared w i t h J u l y a y e a r ago t r a d e of b o t h w h o l e s 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 o c k s of of department s t o r e s and/wholesale f i r m s continued smaller t h a n a year ago. 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 by more than t h e u s u a l s e a s o n a l amount i n J u l y and fof t h e f i r s t time t h i s y e a r were l a r g e r t h a n i n t h e c o r r e s p o n d i n g month of 1927. I n c r e a s e s , compared w i t h l a s t y e a r , were r e p o r t e d i n l o a d i n g s of m i s c e l l a n e o u s commodities and o f g r a i n , 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 of the crop t h i s y e a r . l i v e s t o c k shipments. The l a r g e s t d e c r e a s e , a s compared w i t h a y e a r a g o , was i n During t h e f i r s t two weeks i n A u g u s t , t o t a l l o a d i n g s were i n a b o u t t h e same volume a s i n t h e c o r r e s p o n d i n g weeks of 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 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 s l i g 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 d v a n c e s i n t h e p r i c e s of l i v e s t o c k and m e a t s , a l t h o u g h t h e r e were a l s o s m a l l i n c r e a s e s i n h i d e and 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 r o l e u m p r o d u c t s , and b u i l d i n g m a t e r i a l s . There was a s h a r p d e c l i n e i n t h e p r i c e of g r a i n s , o t h e r t h a n c o r n , and some d e c r e a s e i n c h e m i c a l s and d r u g s , s i l k , r u b b e r , and a u t o m o b i l e t i r e s . D a r i n g t h e f i r s t h a l f of August t h e r e were i n c r e a s e s i n 4 * -3- X-6119 t h e p r i c e s of s u g a r , h o g s and p o r k p r o d u c t s , c o k e , and l u m b e r , and d e c r e a s e s i n g r a i n s , c o t t o n , wool and h i d e s . Bank C r e d i t — B e t w e e n J u l y 18 and August 15 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 d e c r e a s e d b y a b o u t $ 1 3 0 , 0 0 0 , 0 0 0 . This decline 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 b a n k s i n Hew York C i t y , and some f u r t h e r d e c l i n e i n l o a n s on s e c u r i t i e s . A l l o t h e r l o a n s , which i n c l u d e l o a n s f o r commercial p u r p o s e s , showed a s m a l l s e a s o n a l i n c r e a s e and a t t h e m i d d l e of August were i n t h e l a r g e s t volume s i n c e e a r l y i n 1921 and n e a r l y $ 2 3 0 , 0 0 0 , 0 0 0 l a r g e r t h a n a t t h e autumn p e a k of l a s t y e a r . T h e r e - w a s - a f u r t h e r - ' l a r g e d e c l i n e i n n e t demand d e p o s i t s , and p r a c t i c a l l y no change i n t i m e d e p o s i t s . Volume of r e s e r v e bank c r e d i t o u t s t a n d i n g showed l i t t l e c h a n g e between J u l y 25 and August 2 2 . D i s c o u n t s and a c c e 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 U n i t e d S t a t e s s e c u r i t y h o l d i n g s were p r a c t i c a l l y u n c h a n g e d . I n c r e a s e d demand f o r c u r r e n c y , w h i c h i s u s u a l a t t h i s t i m e of t h e y e a r , h a s n o t r e s u l t e d i n an e q u i v a l e n t g r o w t h 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 was 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 by member b a n k s , which r e f l e c t e d t h e d e c r e a s e i n their deposits. There were f u r t h e r i n c r e a s e s between t h e m i d d l e of J u l y and t h e m i d d l e of August i n o p e n - m a r k e t r a t e s on c o l l a t e r a l l o a n s , commercial p a p e r and b a n k e r s ' acceptances.
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