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F E D E R A L E I S 1 E T B O A R D „ -
STATEMENT FOR THE PRESS
F o r
r e l e a s e
i n
Morning Pa pe rs ,
Monday, August 2 7 , 1 9 2 8 .
T he f o l l o w i n g i s a summary o f g e n e r a l
b u s i n e s s a n d f i n a n c i a l c o n d i t i o n s
th roughout t h e seve ra l Fede ra l Rese rve
D i s t r i c t s , " based u p on s t a t i s t i c s f o r
t h e months o f J u l y a n d August , a s w i l l
appea r
i n t h e
f o r t h c o m in g 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
a n d t h e
monthly
r e p o r t s o f t h e F e d e r a l r e s e r v e h a n k s .
I n d u s t r i a l
a n d
t r a d e a c t i v i t y
w a s i n
la rger volume
i n
J u ly t h a n
i s
usua l
i n midsummer a n d t h e g e n e r a l l e v e l o f commodi ty p r ic e s advanced s l i g h t l y . Mem-
b e r h a n k h o ld in g s o f s e c u r i t i e s a n d l o a n s o n s e c u r i t i e s de c l i n ed i n J u l y an d
August , whi le
a l l
o th e r l o a n s i n c r e a s e d
t o t h e
h i g h e s t l e v e l
o n
re co rd . Condi-
t i o n s i n t h e money market rema ined f i rm .
P r o d u c t i o n — P r o d u c t i o n o f m a n u f a c t u r e s a n d minera ls showed a s m a l l e r d e -
c r e a s e t h a n u s u a l
i n
J u l y ,
a n d t h e
index
o f
in du s t r i a l ' p r od uc t ion , which makes
a l lowance f o r s e a s o n a l v a r i a t i o n s , a d v an c e d. P r o d u c t i o n o f s t e e l , b i t u m in o u s
c o a l , p e t r o l e u m , a u to m o b i l e s ,
a n d
foo twea r
w a s
l a r g e r
i n
Ju ly than
i n
June , whi le
a c t i v i t y i n t e x t i l e m i l l s , m ea t p a c k i ng , a n d coppe r a n d a n th r a c i t e m in e s d e c l i n e d .
Lumber pr od uc ti on showed l e s s t han t h e u s u a l s e a s o n a l d e c r e a s e . S t e e l m i l l a c t i v -
i t y ,
w h i l e d u r in g J u ly
w a s a t a n
u n u s u a l l y h i g h l e v e l
f o r t h e
summer season,
w as
wel l ma in ta i ned dur ing Augus t . Weekly re po r t s f rom De t r o i t f a c t o r i e s show a
la rger volume o f employment i n t h e m id d l e o f August than a t a n y p r e v io u s d a t e ,
i n d i c a t i n g t h a t a u to m o b i l e p r o d u c t i o n c o n t i n u e d l a r g e
i n
t ha t month. Bu i l di ng
c o n t r a c t s a w a r d e d d e c l i n e d b y somewhat more than t h e usua l seasona l amount i n
J u l y , b u t we re l a rge r than i n a n y p r e v i o u s J u l y , t h e in c r ea se ove r l a s t yea r
b e i n g c h i e f l y i n r e s i d e n t i a l b u i l d i n g . Con t ra c t s awarded i n t h e f i r s t two
weeks
i n
August we re s l i g h t l y sma l le r than
i n t h e
same pe r i od
o f
l a s t y e a r .
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, i - -
, w
• E s t i m a t e s o f t h e Department o f A g r i c u l t u r e a s o f August 1 i n d i c a t e c o n s i d e r a b l e
improvement i n c rop con d i t ion s du r ing Ju ly . Es t ima te d whea t p rod uc t ion w as
8 9 1 ,00 0 ,0 00 b u s h e l s , l a r g e r
b y
91 ,000 ,000 than on , J u l y
1 a n d
s l i g h t l y l a r g e r
than t h e y i e l d i n 1 9 2 7 . T h e corn crop i s e x p e c t e d t o b e more than 3,000,000,000
b u s h e l s ,
a n
i n c r e a s e
o f
750 ,000 ,000 bus he l s f rom l a s t yea r . Fo r ec as t s
f o r
o ther
g ra in c rops were a l s o l a rg e r t han t h e J u l y 1 e s t i m a t e s a n d i n most cases exceeded
l a s t y e a r ' s y i e l d s .
T h e
August
1
f o r e c a s t
o f
c o t t o n p r o d u c t i o n
w a s
14 ,290,000,
a s compared wi t h y ie ld s o f 12 ,955 ,000 ba le s i n 1927 and nea r ly 18 ,000 ,000 ba les
i n 1 9 2 6 .
T r a d e — D i s t r i b u t i o n
o f
commodit ies
a t
w h o l e s a l e
a n d
r e t a i l
w a s i n
l a r g e
volume i n J u l y . S a l e s o f d r y goods a n d shoes a t who le sa l e were l a rg e r t han i n
J u n e ,
a n d
t h o s e
o f
o th e r l i n e s were on l y s l i g h t l y sma l l e r . Depar tment s t o r e
s a l e s , a f t e r a l l ow a n ce f o r season a l changes , i nc rea sed i n J u l y . Compared wi th
J u l y
a
y e a r
a g o
t r a d e
o f
b o th who les a l e
a n d
r e t a i l f i r m s
wae -
l a r g e r . S t oc k s
o f
o f
depar tmen t s t o r es and /who les a l e f i rm s con t inu ed smal l e r t ha na yea r a g o .
F r e i g h t - c a r l o a d i n g s i n c r e a s e d
b y
more than
t h e
usual seasonal amount
i n
J u l y a n d
o
t h e f i r s t t ime th i s yea r were l a rg e r t han i n t h e co r r espond ing
month
o f 1 9 2 7 .
In c r ea se s , compared wi t h l a s t yea r , were r e po r t ed
i n
load ings
o f misce l l aneous commodi t i e s a n d o f g r a in , r e f l e c t i n g t h e e a r l y h a r v e s t i n g o f
t h e
c r o p t h i s y e a r .
T h e
l a r g e s t d e c r e a s e ,
a s
compared wi t h
a
yea r
a g o , w a s i n
l i ve s t oc k sh ipmen t s . During t h e f i r s t tw o weeks i n Augus t, t o t a l l oa d in gs were
i n
about
t h e
same volume
a s i n t h e
c or r esp ond ing weeks
o f
l a s t y e a r .
P r i c e s — T h e g e n e r a l l e v e l o f who les a l e commodi ty p r i c e s inc rea se d s l ig h t l y
i n J u l y r e f l e c t i n g c h i e f l y a dv an ce s i n t h e p r i c e s o f l i v e s t o c k a n d mea ts , a l tho ugh
th e r e were a l so smal l i nc re as es i n h i d e a n d l e a t h e r p r o d u c t s , t e x t i l e s , p e t ro l e um
p r o d u c t s , a n d b u i l d i n g m a t e r i a l s . T he re w as a s h a r p d e c l i n e i n t h e p r i c e o f
gra ins , o the r t han co rn ,
a n d
some decrease
i n
chemica l s
a n d
d r u g s , s i l k , r u b b e r ,
a n d a u t o m ob i l e t i r e s . D a ri n g t h e f i r s t h a l f o f August there were increases i n
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t h e p r i c e s o f sugar , hogs a n d po rk p ro duc t s , coke , a n d lumber, a n d d e c r e a s e s i n
gr a i ns , co t to n , woo l
a n d
h i d e s .
Bank Credit—Between July 1 8 an d August 1 5 t o t a l lo a n s a n d i n v e s t m e n t s o f
member banks i n l e a d i n g c i t i e s d e c re a s e d b y about $130,000,000 . This dec l i ne r e -
f l e c t e d a c o n s i d e r a b l e r e d u c t i o n i n i n v e s t m e n t s , c h i e f l y a t banks in Hew York
C i t y ,
a n d
some fu r t h e r dec l in e
i n
loans
o n
s e c u r i t i e s .
A l l
other loans, which
inc lude loans
f o r
commercial pu rp os es , showed
a
smal l seasona l i nc rease
a n d a t
t h e middle o f August were i n t h e l a rges t vo lume s ince ea r ly i n 1 9 2 1 a n d n e a r l y
$230,000,000 larger than
a t t h e
autumn peak
o f
l a s t yea r . There -was-a fu r th e r - ' l a rg e
d e c l i n e i n n e t demand de po si t s , a n d p r a c t i c a l l y n o change i n t ime depos i t s .
Volume o f re se rv e bank cr ed i t ou ts ta nd in g showed l i t t l e change between Ju ly
2 5 a n d August 2 2 . Di scoun t s a n d a c ce p t a n c e h o l d i n g s i n c r e a s e d s l i g h t l y w h i l e
Uni t ed S t a t e s se cu r i ty ho ld i ngs were p r a c t i c a l l y unchanged . Inc rea sed demand
f o r
cur rency, which
i s
u s u a l
a t
th is t ime
o f t h e
y e a r ,
h a s n o t
r e s u l t e d
in an
equ iva len t g rowth i n r e s e r v e b a n k c r e d i t , b e c a u s e i t w a s o f f s e t i n p a r t by a
d e c l i n e i n r e s e r v e s r e q u i r e d b y member banks, which ref lec ted t h e d e c r e a s e i n
t h e i r d e p o s i t s .
There were f u r t h e r inc re as es between
t h e
midd le
o f
J u l y
a n d t h e
midd le
o f
August i n open-marke t r a t e s o n co l l a t e r a l l oan s , commerc ia l paper a n d banker s '
accep tances .