Credits & Debits

In last week's Federal Reserve figures two significant statistics stood out:

Bank Credit (loans and investments in 101 cities) dropped to $20,536,000,000, a two-and-a-half year low, continuing a steady ten-month slide. The complete sluggishness of business was demonstrated by its ever-waning interest in commercial loans. In New York City, an apparent reversal of the trend--an almost unparalleled rise of $465,000,000 in bank credit-- was actually a confirmation of the condition. The temporary fluctuation was caused by banks (having more & more difficulty in finding investments) buying up huge quantities of maturing Treasury obligations so as to be able to turn them in for new bonds and notes being offered this week.

Bank Debits (withdrawals from individual checking accounts in 274 cities). With the advent of Depression II, bank debits slumped at once as people tightened their purse strings. The total touched bottom in February. Subsequent figures, charted with seasonal allowances, show that since early March public buying has held at a fairly even pace. Last week's bank debits were $6,850,000, 18% under a year ago but the same as the previous week. Significance: though production of goods is still dropping, buying has apparently steadied--an optimistic sign.

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