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X-6205 FEDERAL RESERVE BOARD STATEMENT FOR THE PRESS For r e l e a s e i n Morning Papers, Friday, December 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 for the months of November and December, 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. I n d u s t r i a l a c t i v i t y declined somewhat in November, but continued above the level of a year ago. Wholesale commodity p r i c e s declined f u r t h e r , r e f l e c t i n g p r i n - c i p a l l y a continued decrease in the p r i c e s of farm products. Security loans of member banks declined sharply a f t e r the f i r s t week of December, while other loans increased. Production—Total output of manufactures was somewhat lower in November, r e f l e c t i n g primarily a decrease in production of automobiles and s t e e l , larger than i s usual at t h i s season, but t o t a l output continued l a r g e r than a year ago. Pro- duction of pig iron and copper continued to increase in November, and t e x t i l e mills remained a c t i v e . Meat-packing and sugar r e f i n i n g declined seasonally during the month, and the production of building materials was smaller. Factory employment and payrolls were seasonally reduced but were larger than i n 1927. Mineral produc- t i o n was i n about the same volume as in October, according to the Federal Reserve Board's index which makes allowance for seasonal v a r i a t i o n s . Increases occurred in the production of copper, zinc, and t i n , while both a n t h r a c i t e and bituminous coal decreased and the output of petroleum was somewhat smaller. The value of building contracts awarded i n November and the e a r l y p a r t of December receded sharply from the record f i g u r e s of the two preceding months. The November t o t a l was s l i g h t l y l a r g e r than i n the corresponding month in 1927, and the volume of contracts for the f i r s t two weeks of December xras smaller than a year ego. ; -2- l o o X-6205 The December f o r e c a s t of the Department of Agriculture increased the e s t i mated 1928 production of cotton by 240,000 "bales to a t o t a l of 14,373,000 "bales, which i s nearly 11 per cent l a r g e r than a year ago. The t o t a l value of crops, "based on December farm p r i c e s , i s estimated a t $8,456,052,000 as compared with $8,522,563,000 i n 1927. Trade—Department store sales showed a seasonal increase in November when allowance i s made f o r the number of business days, and approximated those of a year ago, while inventories continued smaller than in 1927. Sales a t wholesale declined seasonally, but were l a r g e r than in the same month of l a s t year. Rail- road f r e i g h t shipments decreased i n volume during November and the early part of December, but continued l a r g e r than i n 1927* The decrease from October was es- p e c i a l l y marked in loadings of miscellaneous f r e i g h t . Prices-—Wholesale commodity p r i c e s decreased f u r t h e r in November and the f i r s t two weeks of December. The l a r g e s t p r i c e declines during the six-week period were in farm and food products and l e a t h e r , while several groups of i n d u s t r i a l products, notably iron and s t e e l , nonferrous metals, and cotton goods, were generally higher. Wholesale p r i c e s of gasoline and.automobile t i r e s declined. Among the a g r i c u l t u r a l products, p r i c e s of raw s i l k , corn, livestock, and meats were lower during November, while raw cotton and wool, wheat and oats increased somewhat. During the f i r s t two weeks of December, however, p r i c e s of a l l these products, with the exception of raw s i l k , declined. Building materials were generally higher in November, but de- clined somewhat i n the middle of December. Bank credit—Loans and investments of member banks in leading c i t i e s increased $329,000,000 during the four-week period ending December 19. The advance during the f i r s t two weeks r e f l e c t e d c h i e f l y a rapid increase in s e c u r i t y loans, which include loans to brokers and dealers in s e c u r i t i e s . Subsequently, at sharp decline X-6205 in loans on s e c u r i t i e s was more than o f f s e t "by a rapid, increase in a l l othbr loans and. in holdings of investments. The increase in a l l other loans, which include loans f o r commercial purposes, was contrary to the usual movement a t t h i s season and c a r r i e d the t o t a l to the highest f i g u r e in eight years. Seasonal growth in the demand for currency in November and December, together with increases i n member "bank reserve requirements, consequent upon an increase in t h e i r deposits, have "been r e f l e c t e d in larger "borrowings "by the member "banks from the reserve "banks. This recent growth, following upon demand caused by the loss of gold in e a r l i e r months, has c a r r i e d the t o t a l volume of reserve "bank c r e d i t to the highest level in seven years. The r a t e s on c a l l and time loans on security c o l l a t e r a l increased during the l a s t week in November and the f i r s t part of December, while r a t e s f o r commercial paper were generally steady. Rates on c e r t a i n m a t u r i t i e s of bankers b i l l s increased
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