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F E D E R A L R E S E R V F B 0 A R D. ST ATFfvlElilT FOR THE PRESS For release in Morning Papers, Thursday, March 1, 1723. The following is a sumiTary of general business and financial conditions throughout the several Federal Reserve Districts during the month of February, as contained in the forthcoming issue of the Federal Reserve Bulletin. Further increase in the volume of production in basic industries to a level highet than in 1Sl9 or ~920, a continued advance in the prices of rr.any basic commodities, additional borrowing from banks for commercial purposes, and somewhat higher money rates are the principal recent developments in the business situation. Production in basic industries, as measured by the Federal Reserve Board 1 s index, 'vas 6 per cent hisher in January than in recember, and reached a volume exceeded only once in the past, in ~Jay, 1317. Production of steel ingots and of anthracite coal and mill consumption of cotton sho1·:ed particularly large advances, and most other important industries increased their output •. Building operations have been rr.aintained on a large scale. The expansion in production durins January was accompanied by a substantial increase in freight shipments. Car loadint;s of fores·t products, reflect in;; the cant inued buildine-; activity, reached .. X-3S45 - 2 - the hi;hest monthly total en record., and loadinc:s of merchandise and r::1iscellaneous commodities were hi;her than in any January of the ~ast four years. Industrial employment continued to increase durin::-~ January, and shorta;es of both sl-illed and uns"killed labor were reported by textile mills, steel mills, and anthracite coal mines. Itore wac;e increases at industrial establislli:tents were announced than in De cenb er. There is still so:r;'e ,merq;loyrnent in stat2s west cf the I'1ississippi. In industrial and cocrnercial centers there has recently been a lar~er demand for office 1-vcrkers t al thowh throushout the country there is muc:"l uneiYployment in this The index number of the Tiureau of Labor :ruted from the ·:vholesale ~;rou:zJ. Stati~tics, com- prices of about 40C commodities, includ- int, finished and semi-finished ;roducts as well as raw m:~teri.:;.ls, sho,ved the same avera;:e level of ;rices in January as in November and ::::ecember. :Set·.veen ~e cen:ber and January the prices of cloth- in:;, fuel, metals, buildin;:; ::r..s,teric;,ls, c:1erdcals and hcuse furnishin;:-;s adv2,nced, but these advanc.::s -,,'ere accom:;::;e.nied by declines in farl:"l products and. food, so thz,t the come ined index rerraine::l unch:mgad. :::'urin::: recent weehs the ::.'rices of a rro.."Ylter of basic corrmodities advanced ra;idly and in rr.arry cases reached the hip;hest points since 1:/20 or the early part of 1321. A;-:on;: commodities reecbin,·c new high levels for the current movement ·vere corn, beef, cotton, wool, silk, hides, lumber, rubber, linseed oil, co::;per, lead and pi:·: iron. . . ... 3 An active distribution of goods for this season of the year is indicated by reports to the reserVe banks both of wholesale Sales of department and retail dealers for the month of January. stores in over 100 cities were 12 per cent larger than in January, 1922. Inventories for January show that there has been no lart:e increase in stocks of boods held by department stores, and the rate of turnover continued rapid. In wholes&le lines there were particular- ly large sales during January of dry goods, drU§.~s, hardware, and farm implements. The larger volume of commercic:tl borrowin,z, at member banks in recent weeks has been contrary to the usual trend of the season. Commercial loans of reportim:; member banks on February 14 <vere $243,000,000, or 3 per cent larger than at the end of December and 7 per cent above the level at the end of July, when the general deII"and for credit first showed an upward turn. This increased de~nnd for credit at the member banks has resulted recently in an increased volume of borrowin,q by the member banks at the reserve banks, chiefly :Boston, New York, and Philadelphia. On February 21, the loans to member banks were $246,000,000 higher than in mid-summer. ~62B,OOO,OOO or Juring the same period the volume of Government securities and bankers 1 acceptances held by all Federal Reserve Ianks declined $1GO,OOO,OOO,resulting therefore in a net increase of $G7,000,000 in the loans and security holdings of the reserve banks. The volume of Federal reserve .... x-3045 - 4- notes in circulation which showed the usual post-holiday decline in January, began to increase on January 31, a week earlier than last year .. Money rates also sho'ved a tan,iency to becom3 firmer, especially in recent weeks. The open market rate for commercial paper, which was 4 per cent last from a range of summer, rose during February 4 1/4 - 4 1/2 to a range of 4 3/4 - 5 per cent. On February 23 ths discount rate on all classes of paper at the I?oston and New Ycrl: reserve banks was advanced from 4 to 41/2 per cent.
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