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X-7253 F E D E R A L R E S E R V E BOARD STATEl,™ FOR THE PRESS For r e l e a s e i n Morning P a p e r s , Satur&ay, September 24, 1932. The f o l l o w i n g summary o f 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 i n t h e United S t a t e s , based upon s t a t i s t i c s f o r t h e m o n t h s o f A u g u s t and S e p t e m b e r , w i l l appear i n t h e forthcoming i s s u e o f 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 i n the monthly reviews of t h e F e d e r a l r e s e r v e banks. Volume o f i n d u s t r i a l p r o d u c t i o n i n c r e a s e d f r o m J u l y t o A u g u s t b y c o n s i d e r a b l y more t h a n t h e u s u a l s e a s o n a l amount, r e f l e c t i n g c h i e f l y expansion i n a c t i v i t y at t e x t i l e m i l l s . Wholesale p r i c e s advanced during A u g u s t and t h e g e n e r a l l e v e l p r e v a i l i n g i n t h e f i r s t t h r e e w e e k s o f S e p tember was somewhat h i g h e r t h a n i n o t h e r r e c e n t m o n t h s . T h e r e was a f u r t h e r g r o w t h i n t h e c o u n t r y ' s s t o c k o f m o n e t a r y g o l d and a n o n - s e a s o n a l r e t u r n flow of currency to the reserve banks. P r o d u c t i o n and employment - I n d u s t r i a l o u t p u t i n c r e a s e d s u b s t a n t i a l l y i n A u g u s t and t h e B o a r d ' s s e a s o n a l l y a d j u s t e d i n d e x showed a n a d v a n c e f r o m 58 t o 60 p e r c e n t o f t h e 1 9 2 3 - 2 5 a v e r a g e . A c t i v i t y at cotton, woolen, s i l k , and r a y o n m i l l s i n c r e a s e d f r o m t h e l o w l e v e l o f o t h e r r e c e n t m o n t h s b y c o n s i d e r a b l y more t h a n t h e u s u a l s e a s o n a l a m o u n t , and t h e r e was a l s o a s u b s t a n t i a l i n c r e a s e i n a c t i v i t y at shoe f a c t o r i e s . Output o f a u t o m o b i l e s , h o w e v e r , d e c l i n e d f u r t h e r and p r o d u c t i o n i n t h e s t e e l a n d l u m b e r i n d u s t r i e s showed n o n e o f t h e u s u a l s e a s o n a l i n c r e a s e i n A u g u s t . During the f i r s t t h r e e w e e k s o f S e p t e m b e r t h e r e was a s l i g h t a d v a n c e i n s t e e l o u t p u t . Employment a t f a c t o r i e s i n c r e a s e d s l i g h t l y more t h a n i s u s u a l a t t h i s season. There were l a r g e a d d i t i o n s t o working f o r c e s i n t h e t e x t i l e , c l o t h i n g , a n d l e a t h e r i n d u s t r i e s , w h i l e i n t h e a u t o m o b i l e , t i r e , and ! X-7253 2 ^ 6 — 2 — m a c h i n e r y i n d u s t r i e s a n d a t c a r - b u i l d i n g s h o p s t h e number e m p l o y e d d e creased further. A g g r e g a t e wage p a y m e n t s i n c r e a s e d l e s s t h a n s e a s o n a l l y . B u i l d i n g c o n t r a c t s awarded up t o S e p t e m b e r 1 5 , a s r e p o r t e d b y t h e F . W. Dodge C o r p o r a t i o n , i n d i c a t e t h a t f o r t h e t h i r d q u a r t e r t h e t o t a l v a l u e o f c o n t r a c t s w i l l b e a b o u t t h e same a s f o r t h e s e c o n d q u a r t e r , w h e r e a s u s u a l l y awards f o r t h e t h i r d quarter a r e s m a l l e r . Currently, contracts f o r p u b l i c works a r e a c o n s i d e r a b l y l a r g e r p a r t o f t h e t o t a l t h a n t h e y were a t t h e b e g i n n i n g o f t h e y e a r and r e s i d e n t i a l c o n t r a c t s a r e a s m a l l e r p a r t . D e p a r t m e n t o f A g r i c u l t u r e c r o p e s t i m a t e s b a s e d on S e p t e m b e r 1 c o n d i t i o n s i n d i c a t e l i t t l e change i n p r o s p e c t s during August. Indicated crops o f w h e a t and t o b a c c o a r e c o n s i d e r a b l y s m a l l e r t h a n i n o t h e r r e c e n t y e a r s , while the corn crop i s the l a r g e s t s i n c e 1925. The c o t t o n c r o p i s e s t i m a t e d a t 1 1 , 3 0 0 , 0 0 0 , a d e c r e a s e of about 6 , 0 0 0 , 0 0 0 b a l e s from t h e l a r g e crop of a year ago. D i s t r i b u t i o n - Volume o f m e r c h a n d i s e and o t h e r f r e i g h t h a n d l e d b y t h e railroads increased s e a s o n a l l y during August, while during the corresponding p e r i o d a y e a r a g o no i n c r e a s e was r e p o r t e d . Department s t o r e s a l e s of m e r c h a n d i s e i n c r e a s e d f r o m J u l y t o A u g u s t b y somewhat l e s s t h a n t h e u s u a l s e a s o n a l amount. Wholesale p r i c e s - Wholesale commodity p r i c e s a d v a n c e d f r o m 6 4 . 5 p e r cent of t h e 1926 a v e r a g e i n J u l y t o 6 5 . 2 p e r c e n t i n A u g u s t , a c c o r d i n g t o t h e m o n t h l y i n d e x o f t h e B u r e a u o f Labor S t a t i s t i c s . During August p r i c e s of many l e a d i n g c o m m o d i t i e s i n c l u d i n g t e x t i l e raw m a t e r i a l s a n d f i n i s h e d p r o d u c t s , wheat, h i d e s , n o n f e r r o u s m e t a l s , s u g a r , r u b b e r , and c o f f e e , increased substantially. I n t h e f i r s t h a l f of September t h e r e were d e c l i n e s X-7253 •* 3 *• i n t h e p r i c e s o f many o f t h e s e c o m m o d i t i e s , w h i l e p r i c e s o f w o o l and w o o l e n goods, c a t t l e , and h i d e s advanced. Bank c r e d i t - D u r i n g r e c e n t w e e k s f u r t h e r g r o w t h i n m o n e t a r y g o l d s t o c k , a r e t u r n f l o w o f c u r r e n c y f r o m h o a r d s , and new i s s u e s o f n a t i o n a l hank n o t e s h a v e r e s u l t e d i n a d d i t i o n s t o t h e r e s e r v e f u n d s o f member "banks. These hanks have employed a p a r t of t h e funds i n f u r t h e r r e d u c i n g t h e i r b o r r o w i n g s a t t h e r e s e r v e h a n k s , and h a v e a c c u m u l a t e d a p a r t a s r e s e r v e b a l a n c e s , w h i c h a t t h e p r e s e n t t i m e a r e more t h a n $ 3 0 0 , 0 0 0 , 0 0 0 i n e x c e s s of required r e s e r v e s . R e s e r v e bank h o l d i n g s o f U n i t e d S t a t e s Government s e c u r i t i e s and o f a c c e p t a n c e s r e m a i n e d p r a c t i c a l l y u n c h a n g e d d u r i n g t h e f o u r weeks ending September 1 4 , w h i l e t h e t o t a l of r e s e r v e bank c r e d i t d e c l i n e d b y $ 4 3 , 0 0 0 , 0 0 0 t h r o u g h t h e r e d u c t i o n o f d i s c o u n t s f o r member b a n k s . L o a n s a n d i n v e s t m e n t s o f r e p o r t i n g member b a n k s i n l e a d i n g c i t i e s showed l i t t l e c h a n g e b e t w e e n t h e m i d d l e o f A u g u s t and t h e m i d d l e o f S e p t e m b e r . A f u r t h e r d e c l i n e o f more t h a n $ 1 5 0 , 0 0 0 , 0 0 0 i n l o a n s b y b a n k s o u t s i d e New York C i t y d u r i n g t h e p a s t f o u r w e e k s was o f f s e t i n l a r g e p a r t b y c o n t i n u e d i n c r e a s e i n i n v e s t m e n t h o l d i n g s , c h i e f l y a t member b a n k s i n Mew York C i t y . T h e r e was a c o n s i d e r a b l e g r o w t h i n d e p o s i t s o f r e p o r t i n g member b a n k s , r e f l e c t i n g i n p a r t l a r g e r b a l a n c e s h e l d by c i t y banks f o r t h e account of other banks. Money r a t e s i n t h e o p e n market r e m a i n e d u n c h a n g e d a t l o w l e v e l s d u r i n g A u g u s t and t h e f i r s t h a l f o f September# I
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