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F E D E R A L R E S E R V E B O A R D
STATEMENT
FOR THE
PRESS
X-6100
F o r r e l e a s e i n Morning Papers,
S a t u r d a y , J u l y
2 8 1 9 2 8 .
The
f o l l o w i n g
i s a
summary
o f
genera 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
throughout
t h e
sev era l Federa l Reserve
D i s t r i c t s , based upon s t a t i s t i c s f o r
t h e
months
o f
June
a n d
J u l y ,
a s
wi l l
appear
i n t h e
fo r thcoming i s s ue
o f t h e
Federa l Rese rve Bu l l e t in
a n d t h e
monthly
r e p o r t s
o f t h e
Fe de ra l r e s e r v e banks.
I n d u s t r i a l p r o d u c t i o n a n d t h e d i s t r i b u t i o n o f commodities i n June were i n
smaller volume than i n May an d th e g e n e r a l l e v e l o f who lesa le p r i ce s , f o l lowing
a sharp advance i n A p r i l and May al so dec li ne d. Member bank c r e d i t wa s i n
record volume early i n J u l y a n d indeb tedness a t t h e reserve banks w as l a r g e r
than
a t a n y
time
i n t h e
p a s t
s i x
y e a r s .
P r o d u c t i o n — A c t i v i t y
o f
m a n u fa c t ur i n g i n d u s t r i e s d e c l i n ed s l i g h t l y
i n
June,
a n d
t h e r e
was a
d e c r e a s e
o f
abou t
6 p e r
cent
i n t h e
output
o f
minerals owing
t o
d e c l i n e s
i n t h e
p r o d u c t i o n
o f
c o a l .
The
manufac tu re
o f
i r o n
a n d
s t ee l dec reased
i n
June
b y
somewhat more than
t h e
usual seasonal amount ,
b u t
t h e r e
a r e
i n d i c a -
t io ns th a t the re were
n o
f u r t h e r d e c l i n e s
i n
J u l y
a n d t h e
i n d u s t r y
w as
somewhat
more act ive than
a
yea r
a g o .
P r o d u c t i o n
o f
f l o u r
a n d
a c t i v i t y
o f
c o t t o n
a n d
wool mi l l s a l s o dec l ine d
i n
June . Automobile pr od uc ti on showed co ns id er ab ly
le ss than t h e u s u a l s e a s o n a l d e c l i n e i n June , a n d weekly employment figures
f o r
D e t r o i t i n d i c a t e t h a t o p e r a t i o n s
o f
automobi le p lan ts were wel l main ta ined
dur ing
t h e
f i r s t t h r e e we eks
o f
J u l y .
The
manufac tu re
o f
a g r i c u l t u r a l i mp le -
ments
a n d
machine to ol s cont inue d
i n
June
a t t h e
h igh l eve l r eached l a s t sp r ing .
P r o d u c t i o n
o f
lumber, copper ,
a n d
shoes ,
a n d
a c t i v i t y
o f
s i l k m i l l s i n c r e a s e d
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vfc ....
- 2 -
X-6100
i n June.
Contrac ts awarded f o r n e w bu i ld i ng con t inued l a r ge i n June a n d
t o t a l awards
f o r t h e
f i r s t h a lf
o f t h e
year exceeded those
f o r a n y
pr ev io us cor resp ondi ng pe r i od . There were in cr ea se s over l a s t yea r
i n c o n t r a c t s f o r r e s i d e n t i a l , i n d u s t r i a l , p u b l i c , a n d e d u c a t i o n a l
build ing. Awards du ri ng
t h e
f i r s t t h r ee weeks
i n
July were
i n
some-
what smaller volume than f o r t h e c or r espond ing pe r io d o f l a s t y e a r .
The J u l y 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 i n d i c a t e
a
y i e l d
o f
wheat
o f
800, 000, 000 bushels,
a
d e c r e a s e
o f 8 p e r
cent
from t h e h a r v e s t e d y i e l d o f 1 9 2 7 a n d a y i e l d o f corn o f 2 ,736 ,000 ,000
b u s h e l s ,
a
r e d u c t i o n
o f 2 p e r
c e n t .
The
p r o d u c t i o n
o f
o a t s , b a r l e y ,
w h i t e p o t a t o e s , a n d tobacco i s expec ted t o b e l a r g e r t ha n l a s t y e a r .
The a c r e a g e o f c o t t o n i n c u l t i v a t i o n on J u l y 1 was e s t i m a t e d a t
4 6 ,6 9 5 ,0 0 0 a c r e s ,
a n
i n c r e a s e
o f 1 1 p e r
cen t
a s
compared wi th t h a t
o f a y e a r a g o .
T r a d e — M e r c h a n d i s e d i s t r i b u t i o n
a t
r e t a i l
a n d
wholesa l e
was
s e a s o n a l l y s m a l l e r i n June than in May. S a l e s o f depar tment s tores
d e c l i n e d b y about t h e usual seasonal amount , whi le t h e d e c l i n e s i n
s a l e s
o f
chain s to r e s were sma l l e r . Sa l es
o f
wholesa l e f i rms
i n
most
l i n e s
o f
trade showed
a
more than us ua l se as on al d e cl i ne . Compared
w i t h a y e a r a g o s a l e s o f depar tmen t s to r es a n d chain s tores were
l a r g e r a n d those o f whol esa l e f i r ms were sm al le r . S tocks o f whole-
s a l e f i rm s were i n abou t t h e same volume a t t h e e n d o f June a s a year
a g o a n d those o f depar tmen t s to r es were smal l e r .
F r e i g h t - c a r l o a d i n g s f o r p r a c t i c a l l y a l l c l a s s e s o f commodities
d e c l i n e d
i n
June
a n d
con t inued
i n
smaller volume than
a
y e a r
a g o .
During
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.. ; - 3 - X--5100'
t h e f i r s t tw o weeks o f July, however, owing t o i n c r e a s e s i n l o a d i n g s o f
g r a i n s
a n d
mis cel lan eou s commodi t ies , t o t a l loa din gs were la rg er than
i n t h e cor responding -oer iod o f 1 9 3 7 b u t co nt in ue d below t h e high level
o f 1 9 2 6 .
P r i c e s — T h e g e n e r a l l e v e l
o f
whol esa l e commodi ty p r i c e s de cl in ed
i n June a n d t h e Bureau o f Labor S t a t i s t i c s i ndex , wh ich h a d advanced
from
9 6 p e r
cen t
o f t h e 1 9 2 6
average
i n
March,
t h e l o w
p o i n t
f o r t h e
y e a r , t o 9 8 . 6 p e r c e n t i n May d e c l i n e d i n June t o 9 7 . 6 p e r c e n t . The .
d e c l i n e i n t h e a l l - c o m m o d i t i e s in d e x r e f l e c t e d d e c r e a s e s i n those
groups which
h a d
advanced most rapid ly
i n
pr ev io us months—•farm pr od uc ts ,
f o o d s , a n d h i d e s a n d l e a t h e r p r o d u c t s . P r i c e s o f l i v e s t o c k a n d meats ,
which a r e i n c l u d e d i n th es e gr ou ps , however , showed f u r t h e r advan ces
i n
J u n e ,
a n d
t h e r e
w as
a l s o
a n
i n c r e a s e
i n t h e
p r i c e s
o f
b u i l d i n g
m a t e r i a l s , w h il e p r i c e s o f s i l k a n d r a yo n, f e r t i l i z e r m a t e r i a l s , h ou se
f u r n i s h i n g s ,
a n d
au tomobi l e t i r e s dec l i ne d . Dur ing
t h e
f i r s t t h r e e
weeks i n J u l y t h e r e w e r e d e c l i n e s i n . t h e p r i c e s o f wheat a n d c o t t o n ,
a n d advances i n t h o s e o f c a t t l e a n d hogs.
9
Bank c r ed i t—Member bank c r ed i t , a f t e r r i s ing
t o a
record volume
e a r l y i n Ju ly , d ec l i ne d somewhat dur ing t h e t w o fo l lowing weeks a n d o n
J u l y
18
t o t a l l o a n s
a n d
i n v e s t m e n t s
o f
r epor t ing banks
i n
l e a d i n g
c i t i e s were about ' $160 ,000 ,000 smal l e r t han four weeks ea r l i e r .
The
d e c r e a s e
w a s
l a r g e l y
t h e
r e s u l t
o f
r e d u c t i o n
b y
about $125,000,000
i n
t h e b a n k s ' i n v e s t m e n t h o l d i n g s , b u t r e f l e c t e d a l s o a d e c l i n e i n t h e
volume o f l o a n s on s e c u r i t i e s f o ll o wi n g a temporary increase over the
mid-year . Con t r a ry
t o t h e
u s u a l s e a s o n a l t r e n d , l o a n s l a r g e l y
f o r
commercial purposes were i n record volume during t h e p e r i o d .
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Member ba nk borrowing
a t t h e
reserve banks showed
a
d e c l i n e f o l l o w i n g
t h e m i d - y e a r s e t t l e m e n t p e r i o d , b u t t h e volume on J u l y 2 5 a t s l i g h t l y
more than $1 ,000,000,000, w as somewhat larger than f ive weeks ear l ier .
Holdings o f a c c e p t a n c e s and U n i t ed S t a t e s s e c u r i t i e s d e c l i n e d d a r i n g t he
p e r i o d .
I n Ju ly the re were fu r the r advances i n open market ra tes f o r commercial
paper
a n d
b i l l s ,
a n d
d i s c o u n t r a t e s
a t
seven
o f t h e
Federa l reserve banks
were ra ised f rom 4 | t o 5 p e r cen t .
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