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October 4, 1958.

My dear Senators
Enclosed are a couple of copies of the analysis I
made last spring before the Hew Jersey Bankers Association
to show the reasons for the downturn and the necessity for
the government program* Enclosed also are various informal
memoranda prepared by the economic staff here reflecting
the definite upturn in industrial production and the other
indices—all going to show that the program and the so-called
pump-priming, far from failing, are working. There is no
other way to account for the reversal of the sharp deflation
that threatened and probably would have produced another
major depression but for vigorous government intervention*
I believe you will find in these notes material to answer
the complaints about the increased debt burden, etc* It
would be better, X think, if you should use this information
as your own since it is not officially prepared as Board
material, though I am confident it is entirely accurate.
Let me add my earnest wishes for your success* If
there is anything I can do or any information I can obtain
for you that would be of assistance, do not hesitate to call
on me.
With kindest personal regards;
Sincerely yours,

II. S* Eccles
Chairman
Honorable Robert J* BuUdey
Station H,
Cleveland, Ohio




A COfPAI-ISON OF SOME STATISTICAL SERIES.
Au£. 1937
Reporting member banks
Loans and Investments
Adjusted demand deposits

May 1938

Most recent

28*3 billion
14.9
*

£Q#6 billion
lt 3
^*
*
*

Sept.- 21.2 bill.
*
15.5 »

117
126

Aug.
n

88
64
107

Index of production
Durable goods
Non-durable goods

110

76
51
93

Electric Power Production
Index

124

103

Sept. 113

Department store sales
index

92

78

Aug.

Machine tool order index

180

67

Residential building
contracta, awarded

73 million

Wholesale prices Index,
all commodities Index
fern* products
Monthly Income payments
(expressed as an
annual rate)

October 4, 1938.




83

"

121

"

100 million

67
86

78
67

Sept. 78
" 6 9

69 billion

63 billion

Aug.

64,5 billion