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4? R-868 BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM STATEM:F~NT FOR THE PRESS Tr1e following surnmary of general For release in morning papers, Wo.dnt:sn:;~.y, ~0, Augu,qt business and financial. conditions in the United States, based upon statistics for July and tb~~ first half of I.ugust, will appear.· in the September issue of the Federal Heserve 'Sulletin and in the monthly reviews of the FE:dera.l Reserve Banks. 1941 Industrial activity in July and the first half of August was maintained at the high level reached in June. Wholesale corr...uodity priees advanced furt::1er· and <listribution of cotn.'llodities to concnmr:rs was ir: excGrtiona.1.1y large vol.ume. 'Jol.·1me .JuJy. Vlt:Jre of ird.ustrial outpu.t showed :::.i -~-~u~ change from Jmw to Redu.ctic-ns in ac;ti vity at automobile ':octorJ.es and s tcE:1 mills la~·go1y offs;c;t :i.n t,f:r> total by further 1J creases in the macriLery, dex, which ineJJJ.dcs c..l1owarce for a consic::e.':'&b10 ducl.ino et this season, advancod fro•:t 157 to 162 ')0r cent of .J_! . Al6 ..:.. 5-1939 Steel productjor1, whicr' in June had ceen a.t about 98 per cent of capn.city, declined to 96 ocr cent shutdovm.s at some mills. h~ ,Ju.J:r, In the f5.rst again at atout 9g per cent of capacity. declinerl J.es;J t~1an n~Llf o·,,-jng in part to holiday of August steel output. was J'uto;ncbilc ~co•L·.ct::on in .July usual but in the first hqJ.f of August t"1ere wets a It-868 --2- ;:harp .r·ech:;.ction as most plar:ts were closed to· prepare for the shift to ne1v model production. Activity ].n the continued at a high ratG. :n.onr't~rrous metals industries Early in August copper, pig iron, :md all forrr:s of steel v;·ero placed tmd.er complete mandatory priority control as it became evident tha.t actual demand for tllese metals could not 1)e fulJ.y met. In the vmol, cotton, and ra.yon i;;.;xtile industries and at shoe facto:ries activit:r in July was maintained at or near the pc;ak levels of other recent months and production of chemicals rose further. Output of manufactured foods increased less than seasonally from the high level re,lchoci in JunJ. Coal prorJuctioL dc;clirwd slightly i'1 J:1l,y but as in June y;as unusually large~ maintained at fo:c t:lis time of year. abo~t tho hi;~b Crude petroleu:n production was rate thr;.t ht..d prevailed in the previous two months. Value of construction cunt::.·act m:ards in July incrco..soci furthe:r to n lc.:;vol more than two-fifths higl:'"2r th:.m to F. W. Dodge Corrora tir.n report;3. <: yoar age, cccording The rise r-;:,flected chief::..y a con- ti'1ued increase in ccmtrr.cts for public corlst:r·uctio;:l, mostly projects. defen~>e Private resi::lent5.::1 build:ir.g coYJ.tracts increased somevllat, although there is usun.lly scme decline :1t this season, while awards for other private buildinc declined further from aarlior high levels. Di:Jtributio:l Sales at department stores and i11 rural areas declined 1:y much less than the usual seasonal amount in July and variety store sales 48 r R-863 -3increased further. In the first ho.lf of .August department store sales rose sharply. Total loadings of revenue freight in July and early August f3howed little change from the advanced level reached in June. Grain shipments, which had been larger than usual in !Vlay and June, increased less tha.'1 seasonally and loadings of coal declined so:nev1hat. C0umodi t.y prices The general index of wholesale prices advanced about 2 per cent further from the middle of J-ul;y to the middle of August, reflectir1g sharp increases in prices of a number cf &gricultural and industrial corrimodities. Federal aetion to limit :price increases was extended to additionu.l tasic materials, including burlap, silk, rayon fabrics, rubber, and suga:-, and in tte early part of August prices of these commodities in domestic markets showed little cl1ange or were reduced. On the other hand, prices for paper-bourd, automobile tires, End cotton yarns aad gray goods were advanced with Federal [tpproval; prices of textile products not und0r Federal control continued to rise; and there were considerable increases in prices of lumber, other building mate:r.·iuls, and chemicals. On Aug'J.St 16 it was ~:mnouncod that for Soutil.srn pine mmcimum prices somewhat below recent high levels woulrt become effective on Septmaber 5. _Agricul turo Agricul tu.rnl produc~tion Ln. 1941 may exceocl that in any previ- ous ;;rear, accorCtin,s to inrlicc:. tions vr1. crop[:l ::1re unusually large. Grops of .t\ll~llfJt ·,rh0~t 1, ant..l c~1rryovers of major anc.1 other lea.:iing foodstuffs 49 R-863 are expected to be exceptionally large, while substantial declines in production are indicated. for the major export crops - cotto~l and tobacco. Although the cotton crop is estimated at 10,600,000 running bales, or l,Soo,ooo bales loss than last season, total supplies of cotton will L; about the same owing to a larger carryover on August 1. Marketings of livestock and livE:stock products, except hogs, will b0 substantially a~Jove last year. Fank credit Total loans a."1d investments at reporting banks in 101 leading cities rose further durir..g the five v:eeks ending Aut;ud 13. Co:n- mercial loans continued to increase substantially, while holdings of United Stu.tes Government obl:igu.tions showed little change. Bank ciey:>os- its remained at a high levei. United States Government securit:r prices After advancing to the llighest levels on record, prices of both taxable and partially · tax-·exempt Trt-asur;r bonds declinod somewhat in tho first part of August. On August 15 th.:~ p<:l:rt:ially tax-exmnpt 2-3/4 per ct:mt 1960-65 bonds yield8d ?.06 pc~r cent, co~11pared Fith the a~-1-time lo<.r of 2.02 per cent on .htly 29. showed little change in the period. Yields on Treasur-,t notes
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