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R-37 BOARD OF GOVERNORS ' OF THE FEDERAL RESERVE SYSTEM STATEMENT FOR THE PRESS For release in morning papers, Wednesday, July 28, 1937. The following summary of general business and financial conditions in the United States, based upon statistics for June and the first three weeks of July, will appear in the August issue of the Federal Reserve Bulletin and in the monthly reviews of the Federal Reserve banks. Activity in most manufacturing industries and at mines continued in June at the May level, with allowance for seasonal influences, but the total output was decreased by labor difficulties in steel mills. In July, production at these mills increased. Production and employment Volume of industrial output, as measured by the Board's seasonally adjusted index, was 115 percent of the 1923-1925 average in June as compared with 118 percent maintained in the preceding three months. The decrease was largely accounted for by the decline in steel production. Automobile production declined seasonally and lumber output showed little change. There was considerable reduction in activity at shoe factories and at sugar refineries, while textile production was close to the level of other recent months. At mines output continued in about the same volume as in May. Value of construction contracts awarded, which had declined in May, increased considerably in June, according to figures of the F. W. Dodge Corporation. There was a marked rise in contracts for public projects, R-57 and awards for private building increased somewhat., reflecting chiefly a larger volume of contracts for factories and for apartments. Factory employment and payrolls declined more than seasonally from the middle of May to the middle of June, largely as a result of strikes in the iron and steel industry. In most other manufacturing industries and also in non-manufacturing lines changes in employment were chiefly of a seasonal nature. Agriculture The July 1 cotton report of the Department of Agriculture showed an afcreage of 34,192,000^ which is larger than in any year since 1953, but considerably smaller than the average of 41,424,000 acres for the five years 1928-1952. Reports on other major crops indicate larger production than last season and about equal to the average for 1928-1932. Distribution Distribution of commodities to consumers was maintained in June at the level of other recent months, with allowance for seasonal influences. Department store sales showed a seasonal decline and there was little change in mail-order business. what. Sales at variety stores increased some- Department store trade in the mid-western industrial area in June and in the first half of the year showed larger increases over a year ago than did sales in other parts of the country. Freight-car loadings declined somewhat further in June, reflecting largely a decrease in shipments of miscellaneous freight. Wholesale commodity prices The general level of wholesale commodity prices, which had declined gradually from the beginning of April to the middle of June, advanced -3- somewhat after that time. R-57 Prices of hogs and pork rose considerably and grain prices advanced during most of the period. Steel scrap prices in- creased sharply and prices of tin, zinc, and hides also advanced, while cotton goods and rubber continued downward, In the past week prices for grains declined and cotton prices also moved lower. Bank credit In the four-week period ending July 21 the volume of excess reserves of member banks increased from $810,000,000 to $870,000,000, owing principally to a decline in the amount, of required reserves resulting from a decrease in deposits at member banks in leading cities. Commercial loans of reporting member banks continued to increase both in New York City and in other leading cities during the five weeks ending July 21. There was a substantial decline in adjusted demand de- posits, mostly at New York City banks. This decline corresponded to de- creases in holdings of United States Government obligations, following increases at the time of new Treasury note issues at the middle of June, and in holdings of other securities. Loans to brokers and dealers in securities, which increased in June, declined during the first three weeks of July. Money rates Open-market rates on Treasury bills and yields on Treasury notes and bonds declined in July to the lowest levels since March.
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