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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. Reporting member banks Loans and Investments Adjusted demand deposits Au£. 1937 May 1938 Most recent 28*3 billion 14.9 * £Q#6 billion l^t* 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
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