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X-6185 FEDERAL RESERVE ^55 BOARD STATEMENT FOR THE PRESS For release i n Morning Papers, Wednesday, November 28, 1928. The following i s a summary of general business and f i n a n c i a l conditions throughout the several 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 October and November, as w i l l appear in the forthcoming issue of the Fede r a l Reserve B u l l e t i n and the monthly reports of the Federal reserve banks. Industry continued active in October and the d i s t r i b u t i o n of commodities was in large volume. Wholesale commodity p r i c e s declined sharply owing c h i e f l y to decreases i n the p r i c e s of farm products« Member bank credit in use increased in October and November, while reserve bank Credit outstanding ehowbd l i t t l e changet Conditions in the money market were eotoewhat easier* Production—Industrial production continued in October a t the high level ofSeptember and considerably above the level of a year ago. Output of minerals in- creased over September, while the production of manufactures declined s l i g h t l y . Factory employment and p a y r o l l s increased to the highest level since early i n 1927. The production of pig iron ,„was p a r t i c u l a r l y large i n October and the f i r s t half of November,* and the output of s t e e l continued in record volume. Automobile production declined considerably in October a f t e r exceptional a c t i v i t y i n September, and showed f u r t h e r reduction in November, as i s usual a t t h i s season. Activity increased in October i n meat-packing and in the t e x t i l e i n d u s t r i e s , with the exception of s i l k . Copper mining and smelting continued a t a high l e v e l , and the output of coal and petroleum increased by more than the usual seasonal amount, while the production of zinc declined. lumber a n i building m a t e r i a l s . There was also a decline in the output of * 5 6 -2- X-6185 Building contracts awarded continued to increase in October and were larger than in that month of any previous year, "but declined sharply during the f i r s t two weeks of November. The increase in October was due p r i n c i p a l l y to large contracts for engineering and i n d u s t r i a l p r o j e c t s . The November cotton crop estimate of the Department of Agriculture was s l i g h t l y larger than the October estimate and indicated a y i e l d of 14, 133,000 bales, 1,178,000 more than the production of 1927. Winnings of the current crop p r i o r to November 14 t o t a l e d 11,320,302 bales, compared with 10,894,912 in the similar period of a year ago. Indicated yields of wheat, corn, oats, potatoes, and tobacco were l a r g e r than the 1927 crops, while estimates of hay, rye, and flaxseed were smaller. Trade—Department store sales in October were in about,the same volume as in the same period in the preceding year, "but showed somewhat l e s s than the seasonal increase from the high level of September. Inventories of these s t o r e s increased during the month, but continued smaller than a year ago. The volume of d i s t r i b u t i o n a t wholesale was l a r g e r than in September and showed a s u b s t a n t i a l gain over October, 1927. Freight car loadings continued l a r g e r in Octobor and November than a year ago, r e f l e c t i n g c h i e f l y large loadings of miscellaneous f r e i g h t . Prices—Wholesale commodity p r i c e s declined in October a f t e r a continuous increase f o r three months, and the Bureau of Labor S t a t i s t i c s index f o r October, a t 97.8 per cent of the 1926 average, wasover 2 per cent below that f o r September. This decline r e f l e c t e d c h i e f l y large decreases in p r i c e s of farm and food products and hides and l e a t h e r . Prices of i n d u s t r i a l commodities increased s l i g h t l y , with small gains recorded in metals, building materials, and chemicals and drugs. The p r i n c i p a l increases occurred in p r i c e s of iron and s t e e l , copper, and raw s i l k . During the f i r s t three weeks of November p r i c e s of cotton, pig iron, copper and petroleum increased, and p r i c e s of most farm and food products, except corn, pork, r -3- X-6185 and sugar, recovered somewhat a f t e r the October decline. Bank Credit—Between October 24 and November 21 there was a considerable increase in loans and investments of member banks in leading c i t i e s , but at the end of t h i s period the t o t a l was s t i l l below the large volume outstanding at the middle of the y e a r j Loans c h i e f l y f o r commercial purposes remained a t a high level during the p e r i o d and loans on s e c u r i t i e s showed f u r t h e r growth, r e f l e c t i n g a marked increase in the volume of loans to brokers and dealers in s e c u r i t i e s . In- vestments showed f u r t h e r decline. During the four weeks ending November 21 there was l i t t l e change i n the volume of reserve bank c r e d i t in use. Reserve bank holdings of acceptances in- creased f u r t h e r and discounts for member banks declined. During the l a s t week of October and the f i r s t three weeks of November conditions in the money market were somewhat e a s i e r ; the r a t e on four to six months commercial paper declined from a level of 5 l / 2 per cent to a range of from 5 l / 4 to 5 l / 2 per cent, and r a t e s on c a l l and time loans in the open market also declined slightly.
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