X-'*759

F E D E R A L R E S E R V E B O A R D

STATEMSNT FOR THE PRESS

For release in Morning Papers, Monday, December 27, 1926.

The following i s a summary of general "business and f inancial conditions throughout the several Federal Reserve Dis tr ic t s , based upon s t a t i s t i c s for the months of November and December, as contained in the forthcoming issue of the Federal Reserve Bul le t in .

Act iv i ty in manufacturing industries decreased, in November and December,

while production of important minerals continued at a high l e v e l . Wholesale

prices declined to the lowest l eve l in more than two years. Firmer money

conditions in December reflected, the usual seasonal requirements in connec-

tion with holiday and end-of-year a c t i v i t y .

Production:

Factory employment and pay r o l l s declined in November, r e f l e c t i n g de-

creased a c t i v i t y in many inq^ortmt incbistries, but owing to the large out-

put of minerals, the Federal Reserve Board's index of production in basic

industries advanced somewhat during the month. Production of bituminous

coal and petroleum in recent weeks has exceeded a l l previous records, and

output of copper and zinc during the month of November was in unusually

large volume,.. Pig iron production also increased s l i g h t l y in November, but

s tee l mi l l Operations in that month and i n December were considerably re-

duced. Automobile productions which i s not included in the index of pro-

duction in basic industries , declined sharply in November for the second

consecutive month and was smaller than in any month since August, 1925.

Text i le-mil l a c t i v i t y was maintained during November at approximately the

same rate as in October. The value of building contracts awarded showed

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X-4789 . . • • - 2 -

430 lea* than the usual seasonal decl ine In Hovember and was s l i g i t l y larger than in

Hovember, 1925. Awards for the f i r s t ha l f of December l ikewise exceeded those

reported in the corresponding period of l a s t year,

Agriculture:

The Department of Agriculture estimates the value of 55 pr inc ipa l crops

raised i n 1926, on the bas i s of December 1 farm pr i ce s , at $7,802,000,000* com-

pared with $8,950,000,000 i n 1925* Of the decrease i n the value of crops the

decline i a the value of the cotton crop accounts for $580,000,000, and that of

the c o m crop for about $860,000,600, While the t o t a l value of the wheat crop

increased by nearly $40,000,000.

Trade:

In Hovember d i s tr ibut ioh of merchandise at wholesale and r e t a i l showed

the usual decl ine from the a c t i v i t y ear l i er in the autumn* Compared with a

year ago, however, wholesale trade was in about the same volume and r e t a i l trade

larger . Sales of department s tores were about 7 per cent larger than l a s t year

and those of leading mail order houses were 6 per cent larger . Stocks of

merchandise carried by wholesale firms declined further i n Hovember and were

smaller a t the end of the month than a year ago. Inventories of department

stores , however, increased s l i g h t l y more than i s usual in November. Freight

car loadings decl ined considerably in Hovember and December from the record high

l e v e l s of October, although the movement of coal continued heavy.

M c o s :

The general l e v e l of wholesale pr ices decl ined i n Hovember and p r i c e s of

many importiint bas ic commodities decreased farther i n the f i r s t h a l f of December.

She Bir#au of Labor S t a t i s t i c s index of wholesale commodity p r i c e s for Hovember

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** 3 «• X - 4 7 5 9

was 148, tho lowest level einoc July, 1924. Bituminous coal prices increaseA3jL sharply (taring October and the early part of November, hat in recent weeks have declined by about two-thirds of the previous rise . Petroleum prices have

1 : ' ' * ' been reduced since early in November* and there have also been declines in pig

iron, copper, zinc, lead, and s i lver. $he fa l l in prices of agricultural com-

modities, which has lasted with few interruptions for over a year, continued ia

November. Grains, however, have risen somewhat since the latter part cf that

month. The clothing-materials and house-furnishings groups have declined

steadily in price (hiring recent months to the lowest levels of the post-war

period.

credit:

Loans and investments of member banks in leading c i t i e s increased by over

$100,000,000 during the four weeks ending December 15, reflecting im part the

growth in the demand for credit and currency that usually occurs in December.

The increase was in loans en securities, while commercial loans declined scpe-

what from their seasonal high point in November.

Hie volume of reserve bank credit showed the usual seasonal increase

after the middle of November but was lower than in the corresponding period of

1925, partly because there was a smaller increase this year in the amount of

money in circulation*

Money market conditions became sl ightly firmer in December than at the end

cf Bovetaber, Commercial paper rates were unchanged but open-meurket rates on

bankers' acceptances advanced by one-eighth of one per cent and cal l rates on

security loans averaged higher for the month.

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