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J A M E S C.
FIRST
239
OLIVER
DISTRICT
HOUSE OFFICE
MERCHANT
MARINE
AND
W O R L D W A R VETERANSIRRIGATION A N D
M A R I O N
LECLAIR
SECRETARY
M AI ME
BUILDING
C o n g r e s of tf)e Πn t t e b S t a t e s i
FISHERIES
LEGISLATION
^ottóc of &epreöentatüjesi
RECLAMATION
ïfia^fngton, 3B- C.
March 16th
Hon. Marriiier S# Eccles, Chairman
Board of Governors of the Federal Reserve System
Washington, D# C.
Dear Sir:
My attention has been called to a release of the Béard of
Governors of the Federal Reserve System
eh 6, 1939j^n which
a sweeping reply is made to the proposals contained in various bills
in Congress, such as that of Hon* M # M* Logan of Kentucky (S. 31);
the Mil introduced by Hon. Brent Spence of Kentucky in the House of
like purport; the bill introduced by Hon. Wright Fatrnan of Texas;
the bill introduced by Hon* John
Rankin of Mississippi, and probably
others. Your release groups the substance of these bills as those
favoring the control of the purchasing power of money by regulating
the volume of money.
Your release says:
^Those who favor such proposals believe that prices
can be raised by increasing the supply of money, that
prices can be lowered by reducing the supply of money,
and that prices can be kept fairly steady by changing the
supply of money in the right direction at the right time.11
The substance of your release is a denial of the substantial truth of these views. You conclude your argument in the following
words:
J A M E S C. O L I V E R
FIRST
239
DISTRICT
M A R I O N
M A I ME
HOUSE OFFICE
BUILDING
C o n g r e s s of tfje Winittb
C O M M I T T E E S :
MERCHANT
MARINE
AND
WORLD W A R VETERANS'
IRRIGATION A N D
LECLAIR
SECRETARY
FISHERIES
States
LEGISLATION
3t>ott¿e of J^epreaentattoesi
RECLAMATION
WBajS&ington, 3D. C.
••••—2® M.S.E.
n
In view of all these considerations the Board does
not favor the enactment of any bill based on the assumption
that the Federal Reserve System or any other agency of the
Government can control the volume of money and credit and
thereby raise the price level to a prescribed point and
maintain it there.n
Since your release broadly denies the law of supply and demand,
it seems unnecessary to go further than to examine the question as to
whether you are right in your main premise; that the value of money does
not depend upon the supply of money in circulation. Yet you are contradicted by our own experience under the Board of Governors. The index of
the purchasing power of money was 145 in May, 1913. When money was expended
in financing the World liar, the index of the purchasing power of money fell
to 60 in May, 1920, less than half what it had been before the expansion
of the money supply took place. The country was able thru the Federal
Reserve System to finance the World War and become highly prosperous doing
so. John Skelton Williams said truly, as Comptroller of the Currency,
"That one Act won the War.11 Under that Act the United States Government
raised |40~billion of credits and liquidated a very large part of them.
Andffthe foreign debts had been paid, would have almost completely liquidated the cost of the World War in bonds.
You are contradicted flatly by the experience of 1920-21,
J A M E S C. O L I V E R
FIRST
239
DISTRICT
M A R I O N
M A I ME
HOUSE OFFICE
BUILDING
C o n g r e ö ö of tfje Winittb
C O M M I T T E E S :
MERCHANT
MARINE
AND
W O R L D W A R VETERANSIRRIGATION AND
L E C L A I R
SECRETARY
FISHERIES
States;
LEGISLATION
Hottóc of &epreöentatüjefii
RECLAMATION
IHa^fngton, 3B- C.
3. M.S.E.
when the Federal Reserve Board, "by the contraction of credit and currency
(the money supply), caused the price level to fall from 167 in May, 1920,
r
to 93 in June, 1921. This contraction of credit and currency was deliberate
and intended to increase the purchasing power of money by contracting the
supply of money.
The details of how this was done is set forth in Senate
document 310, published in February, 1923, in which the Federal Reserve banks
under the influence of the Board caused the member banks to put on a drastic
contraction of credit. Farm, products fell to less than half of what they
were. The price of farm and farm ranch lands suffered a loss in market
value of over $20-billion, from which agriculture has never recovered.
The Federal Reserve Board fully understood and used their power
to influence the purchasing power of money by contracting the money supply.
S
The effect on the purchasing power of money was immediately represented by
a rise in the dollar index from 60 in May, 1920, to 107 in June, 1921.
The letter of Governor W. P. G* Harding of May 25, 1920, a copy of which is^f
MS**«
hereto attached, shows 11 different ways in which the Board explained its
power to change the price level and to change the purchasing power of the
dollar.
Since your Board of Governors denies the obvious and contradicts
the self-evident, it is idle to follow the detail by which a justification
is attempted for the conclusions which are obviously and demonstrably unsound
Your Boardfs conclusions are not only contradicted by reason and
by fact but by the experience of other nations. The Government of Great
J A M E S C. O L I V E R
FIRST
239
DISTRICT
M A R I O N
M A I ME
HOUSE OFFICE
BUILDING
C o n g r e s s of tfje 3Hmteb S t a t e s
C O M M I T T E E S :
MERCHANT
MARINE
AND
W O R L D W A R VETERANSIRRIGATION A N D
LECLAIR
SECRETARY
FISHERIES
LEGISLATION
Jfyomste of &epresfentattoei
RECLAMATION
«Sajsfjington, 3B. C.
i.
M.S.S.
Britain now directs the credit operations of the Bank of England and the
Government of Great Britain during the last six years has given comparative
P >
trial production fifty per cent; and has given its people an unbroken _two
per cent rate for the use of money employed in industry.
The unreasonable denial of the obvious in the release of ¿larch 6
is contradicted by the experience of every nation in Europe.
Sweden has
demonstrated how money can be regulated by regulating the supply. Germany
for two years past has had no change in the domestic purchasing power of the
mark. Under managed money it has expanded its index of industrial production
146 per cent since 1932.
During the World War when Italy expanded the lira four times, it
diminished the purchasing power of the lira to one-fourth of what it had been.
When France expanded the franc from sixteen billions in number to
eighty billions, or five times, it diminished the purchasing power of the
franc to one-fifth of what it had been.
The Board of G-overnors of the Federal Reserve System in the
astonishing release submitted not only contradicts the experience we have had
in the United States and the experience in Europe but it flatly contradicts
fJst<
^the ^pinion of the House of Representatives as declared on May 2, 1932, when
the House, after a two days' debate and a unanimous report from the committee
on Banking and Currency passed the Goldsborough bill directing the Secretary
J A M E S C.
FIRST
239
OLIVER
DISTRICT
HOUSE OFFICE
MERCHANT
MARINE
AND
W O R L D W A R VETERANSIRRIGATION AND
M A R I O N
L E C L A I R
SECRETARY
M AI ME
BUILDING
C o n g r e ^ of tfje Winiitb
FISHERIES
LEGISLATION
States
Hottóe of &epre£etttattoefii
RECLAMATION
IHa^fngton, 3B- C.
5. M«S.E.
of the Treasury, the Federal Reserve Board and the Federal Reserve banks
to make effective the policy of restoring the purchasing power of money
to the predepression price level, or the average for the years 1921-29,
inclusive, as found by the Department of Labor.
The ihomas amendment to the Agricultural Adjustment Act was
an expression of jpginion by the Congress of the U. S. thru an overwhelming
vote contradicting the present declaration of the Board* The Thomas amendment recognized the principle that the value of money and the price of commodities would be directly affected by the volume of money. The Board of Governors has made itself responsible for refusing for about six years to use the
means proposed by the Congress of the U. S• for relieving this country of
1
depression.
The President of the U. S., himself, in his famous cable to
the London Economic Conference declared the purpose of the United States to
establish money whose debt-paying purchasing power should remain the same
from one generation to another. And he declared his purpose to restore the
pre-depression price level.
The arguments made by various monetary authorities and by
various groups demanded the expansion of the money supply as a means of
restoring prosperity in 1932. Five hundred pages of testimony was taken by
the committee. Representatives of the National Grange, the National Farmers
Union, the American Federation of Farm Bureaus, and the American Federation
J A M E S C. O L I V E R
FIRST
239
DISTRICT
HOUSE OFFICE
MERCHANT
MARINE
AND
IRRIGATION AND
L E C L A I R
SECRETARY
BUILDING
C O M M I T T E E S :
W O R L D W A R VETERANS-
M A R I O N
M A I ME
FISHERIES
C o n g r e s s of tfje ^Jntteb S t a t e s
LEGISLATION
RECLAMATION
Jfyouat ot JXepresfentattoefii
IHa^fngton, 3B. C.
—6. M.S.E.
of Labor supported the contention«
The farm organizations are now demanding
the expansion of the money supply as a means of restoring prosperity and
employment»
I have not failed to note the argument submitted by the Board in which
it is contended that the banks are full of money* That they have more money
now than they had in 1929.
In your release you say that the demand deposits
in 1929 were |23-billion and |26-billion in 1938 and that the price level was
95 in 1929 and 77 in 1938. You argue from that that the price level, upon
which the purchasing power of money is based, is not affected by the volume of
demand deposits. You fail to point out what money is in its relation to prices»
You fail to point out that demand deposits which are hoarded, which are not in
circulation^ cannot be properly called "money11 because money is ff anything conventionally used as a medium of exchange and measure of value". Demand deposits
not employed as a medium of exchange cannot properly be called "money", although
it is potentially capable of quick conversion into money. But that is true of
securities listed on the exchanges which are quickly convertible into money. But
securities in locked boxes are not money because they do not function as a medium
of exchange and measure of value. Neither are Government deposits in process
of expenditure operating as a medium of exchange. Government demand deposits
comprise the absorption of demand deposits from taxpayers, diminishing the
amount of money used by the taxpayers as a medium of exchange and until the
Government expends the money, it does not function again as a medium of exchange,
nor until it is used as a medium of exchange by the depositor» In 1929 the
J A M E S C. O L I V E R
FIRST
239
DISTRICT
M A R I O N
M A I ME
HOUSE OFFICE
BUILDING
C o n g r e s s of tfje ^Jntteb S t a t e s
C O M M I T T E E S :
MERCHANT
MARINE
AND
W O R L D W A R VETERANSIRRIGATION AND
L E C L A I R
SECRETARY
FISHERIES
LEGISLATION
Jfyouat ot JXepresfentattoefii
RECLAMATION
IHa^fngton, 3B. C.
7 M.8.E.
demand deposits of June 30 for individuals and corporations, excluding
P '
I inter-bank deposits and Governmental deposits, were #22.4-billion; and in 1938
(were |22.8-billion as of June 30. It appears that in the figures you use in
the release for 1938 for demand deposits there has been added over $3-billion
dollars of Governmental accounts because the corporate and individual demand
deposits were only $22.8-billion as of June 30.
This does not appear to be the only error. There is a far more
important oversight made by the Board which does not appear in the statistics
which you recite; and that is the extent to which in 1938 the demand deposits
were hoarded.
The extent to which they are hoarded is relatively ascertainable
by comparing the turnover of check money or checks debited against demand
deposits in 1929 and 1938. The checks debited against demand deposits in
1929 were #1227-billion and #530-billion in 1938, showing that over half of
the |22.8-billion of demand deposits of 1938 were hoarded. This is well known
and is capable of demonstration by an examination of the books of the banks,
which have been available to the Board all these years.
It is perfectly obvious that the Board of Governors has not
taken into account demand deposits having zero circulation, or approximately
zero circulation. It is perfectly obvious that they are entirely unconscious
of the manner in which the circulating medi\3m can be contracted by the
hoarding of demand deposits. These demand deposits which are hoarded are the
reserves
of the great corporations and insurance companies, of investment
J A M E S C.
FIRST
239
OLIVER
DISTRICT
M A R I O N
HOUSE OFFICE
BUILDING
C o n g r e s s of t\)t Winittb
C O M M I T T E E S :
MERCHANT
MARINE
AND
W O R L D W A R VETERANSIRRIGATION AND
L E C L A I R
SECRETARY
M AI ME
FISHERIES
States
LEGISLATION
Jfyouit ot JXepresfentattoefii
RECLAMATION
IHa^fngton, 3B- C.
8. M.S#S.
companies, of those who are merchandising in money and stocks and who sold
their stocks on a colossal scale in 1937-38 and are hoarding the money as
demand deposits awaiting future investments. It is perfectly obvious that
the Board of Governors is responsible for its failure to make a correct diagnosis of the causes which have resulted in the destruction of the value and
market price of farms and ranches and town and city property, and has resulted
in the destruction of the value of securities, and has resulted in the concentration in the few large cities of a great mass of unemployed money which is
being loaned to the Government at negligible rates of interest. Everybody
knows that the debtors of this country who are now compelled to pay their
debts in dollars which have a purchasing power of JL50 are being squeezed to death
being deprived of their property and their right to a living by a contraction process brought about by those who believe in increasing the purchasing
power of money and decreasing the exchange value of the products and services
of Labor.
I do not care to turn from the main point to discuss your observations on the price level because informed students understand that perfectly
well* They know that monopolies can effect individual prices. They know that
unfair trade practices can interfere with the noimal prosperity of the country;
and they also know that the remedies for these things lay in other departments
of Government and that the Board of Governors has no occasion or justification
to excuse itself from giving the country relief thru a proper monetary policy
by pleading that other departments are not discharging their duty to the public.
J A M E S C.
FIRST
239
OLIVER
DISTRICT
HOUSE OFFICE
MERCHANT
MARINE
AND
W O R L D W A R VETERANSIRRIGATION AND
M A R I O N
L E C L A I R
SECRETARY
M A I ME
BUILDING
FISHERIES
LEGISLATION
RECLAMATION
C o n g r e s s i of tfje Wíníítb
Statesi
Hottóe ot &epres¡entatüjefií
IHa^fngton, 3B- C.
—9, M. E« S
I have not failed to observe that your press release states your
sympathy with the restoration of prosperity and the prevention of booms and
depressions, but your release contains no constructive suggestions. On the
contrary, they are obstructive in the highest degree and clearly intended
to discourage those x^rho have been studying this question and who are trying
to bring about a public understanding and to establish the means thru which
the Congress of the U. 8. shall discharge its constitutional duty to regulate
the value of money. Those who founded the Constitution and had had experience
with unstable money put a direct mandate in the Constitution authorizing
and directing Congress to regulate the value of money. And after 150 years
we are confronted by A Board of Governors under the Federal Reserve Act
declaring in effect that the value of money cannot be regulated by the Board
or by anybody else. I wonder if the usefulness of the Board of Governors
as at present organized has not ended.
Yours respectfully,
JAI
April 22, 1959
Monümbln Jmea C. Oliver,
Bous« of Bepreeeutfitiyes,
Wealtliigton*
G*
Daar Mr. Oliver;
ie in rej&y to your lelter of March 16 In y&léi you
raise some
about the Board*s statement on ? rapo sala to tiaiutain pricee et fixed ìmrel© throu^x isonotary action,. In the f i r s t
pifece»I ahould like to cali to your cttoution a wore rscent statmont
of the Board, Issued on Aprii Bt whieh &ay hetófcen'&s- a impplaaeat to
th# earlier statement* In tfeìn at&ttóent tàe Board propoaoe *that
Congr^ea thront appropriate^ ecmaitt^ea or m Joint c o « i t t e * take steps
to deteralne th© objectives by uhich moaet&ry
shall be guided, the validi t y o f differcnt plana and viewe on roonetary
mé credit matterà propoeed or held by agende» Mt&in or omtaid* the
Government, lncluding the Board*# ovci poeltion, and the cktnracter of
governmental isaebinery that isotild br|>est oalculat@d to carry out the
$mrjH?0öö of Congireee in thls important field.*
W t 1 a enclosed.
A ©opy of this st&te^
fte Board haa alwaya recognixsd the importaat role thnt rametary *&etÌo& can play in influencing the course of business ectivity,
mphsymmt, and national incorna, and sin ce the bogirming of the Beserre
Syst® haa mèémotné to pursu» ^ ì c i e s
wt^l^J fcelp to maintaia
econoni c stability* T&e recent stetament, con Coming ^vbich you hsve
^ritten, toc for the purpose of pointing out ea»e of the liraitations
on the ©ffeotivene&s of monetary action tod to raisa the question iðer
prie« etability should be the sole or priaeipal objective of such action*
I t ia the Boardfs belief that the ultimate objectlve should be economic
«tfebillty «ad that in order to achievo it cooperatioubetweenstany agen~
elee within and out si de the Ooveraaent is esaaiitial,
fhis vie* of the Board is illnfftrated by the developaents to
nfcich you refer in your letter* lfonetary action aided in financing the
war, end poli elea pursued by the Syetm in the 1920fe aided in financing
the reconstruetion of the iporld after the war* In the receat depresaion
period, isonetary aotion km been inuch m t * vlgorous thmt in
periods;
FU LE
Hon. James C* Oliver
^ S **
an abundant supply of money has teen maintained ana interest rates
have been reduced to th© lowest levels in history. That, notwithstanding the abundance and cheapness of sioney* business has been less
active in recent years than in earlier periods shows that there were
retarding factors other thaji the supply and cost of money,» During the
war there was en active cieeuaud for money, for financing the production
of needed materials, and during the post-war period it continued in
active demand in various highly profitable private activities. During
these periods, in fact, imsound nsm of credit for speculation in com-*
modities, real estate, and securities developed, which led to later
difficulties.
"She heart of the present problem is contained in the discussion
of idle funds, beginning on.page 6 of your-letter. The failure of the
public to make active use of the idle funds ishich it holds in the form
of currency and deposits is the crux of the difficulties which we face
in our current efforts to further business recovery by monetary means.
As you state, deposits v;hich are idle are not effective in influencing
the course of business activity and the volume of national inco&e, and
the seme is true of hoarded currency. Since 1950 there has been an increase of something like 11,000,000,000 in currency of large denominations reported as in circulation. Most of this is undoubtedly held idle
in private hoards. In addition to the amount of currency in circulation
m d depo^iis in banks «hioh are not being actively used, the banks have
nearly $4,000,000,000 of e^ese reserves. $h#s# e^ess reserves are money
on which banks would like to earn interest but for vhich they can find no
satisfactory mplo^eat. The banks are offering these funds at rates of
interest far below those charged in the 1920* s.- In short, both the banks
and the public with more funds than ever before are finding it impossible
to invest thesa all. Junds currently being made available through the inflow of gold are piling up as hoarded currency, unused deposits, and idle
bank reserves. This is the problem to which you call attention in your
letter and which the Board has frequently discussed In its official publications.
Although recent experience shoves that sizable additions to benk
reserves and deposits do not suffice alone to stimulate a vigorous and sound
business expansion, it is, of course, impossible to forecast the ultimate
effects of adopting a program involving tremendous additions to the supply
of money and bank reserves. In my opinion, such a program would tend to
create a condition of fear and uncertainty in business and financial circles
that would rapidly spread to the general public. As the country was literally flooded with money, the confidence of the public in our monetary eystea
isigbt be shaken to such a degree that inflationary psychology uould darrelop.
In such circumstances, there might be a rush by the public to convert money
into conaodities and equities that would result in a speculative boom* Once
a movement of this type gains headway, it is virtually impossible to regain
POLE
mn* J mm e. ©live*
control of the situation*
iny mtt^sapt to do so rua« til© dem gor of
pm&ipt%tkting s vivl&nt collise in prices mid business. let ta permit the movement to run ite course uncontrolled tsould to invite en
m m m m de^oreOLiiing collapse.
fo
mind» tìi^reiter«*, i t wulä ì>® irre&pom&ibl© publie policy
to adopt & program tritìi contri na sud*! fotmtisX áangere. fö cusnot
expect to couvert a boon tht;t iE bü&ed upon fe&r mû lo m of confi àeuce
iii omr aomet&ry syst^e teto & mimiî mû.Xacting prosperity.
As î $?0i&teá out în
ïreoent
mittle, I edvo^ste' me tba s^o^t effective
b&f&re tin* Silver
of aeitieving our
objective & breed Govexnmeiit pro ¿¿rem of expeadifcureö for no coxp e ti 11v e
mâ sods! benefits along with overy possible
to
private investment. Hevival of private investment, %hieh Is essential
/for miatainaá recovery, depends upon m increase in current coneusption
to a level th&t will not only utilise existing plant tmâ equipment but
Mil provide pmfitiable outlets for investoent in w enterpriee.
You teply in your letter that other count ri a s have been able to
accomplish by stono tary policies th^t ^àich the Board* s statement denies
c ¿ TOöc^piiÄed^ This view, v&ich baa often been stated, does r*ot
nwm to be supported by the facts:
(1} lonet&ry author!tiea of no country h m & ïtikm a» vigorous
action to Inomm®
ripply m ñ ireâum the
»oaey ms bsve t&e
authorities in th^tfoited Bt&tes* (S) Differences in behavior of prices
in this country mâ in Wnglmû mê Sweden, xhe -two countries îcost frequently oited m exemples Of odvaaeed üoaetery policy, birre not been
striking, (5) Such variations in economic development e m bave occurred
in the different countries are attributable to other factors then tsonot&ry
policies* {4} Monetary authorities of other countries the^ealvea do not
believe th&t monetary action alone cm create «ad nmint&ln any desir^Ó
$rlce levai. I «sa informed that in Swetfea th# objectives of the Klfcrebank:* s
policy are substantially thoa# enunciated in the statement issued by the
Bo&rd of öovemors of tie federal
By&tm, in August 1937*
Seither la BigXand nor Bweäm ha© mentami bunk j&îiey aad« a&mey
m&i&w %Um i t íb In the önited gt&tesv firn Swedish Jtllg&sz& ime disbursed
ccm^traMv^ly little through purchases of securities ainc© 1929; ite diecount a m û edrences have been sharply reduced; end its rediscount rat*
to only 2 yet cm* as iigatefft i
1 l/£ yer tmit iör
W
fôdteml Be e erre bmiìce. The cash reserves of the Swedish cossn«rcial
beiiJc», nateli are the bo^isof the deposit curren o y of the country» her«
gr^ti^ iaore^sedfeytÄe lnflow of funds fro« abroad» es here reeerrGs
ia the United 8tete$; but
xntm
by
leadijig eoMfôreial fcisaks
oa loms m m m iowr
thow «hti^ed by lending beaks ia tbe
F ULE
Eon. James 0. Oliver
- 4»
The Bank of Sigi and has pursued a far less expansionist
policy til an that of the Federal Ha servo bank 3* It M s done little
to expend coi&erciaX bank reserves throu#i security operations* î'rom
tine to time it has disbursed funds through the purchase of large emounts
of gold, but the gold acquisitions of the British Exchange Sanali sat ion
Account have been sterilised and prevented from increasing the amount of
money available to the public, in sharp contrast to the way that the gold
inflow has tern handled in this country. In England the growth in the
i m m â for currency end the needs of the banks for additional reserves
against deposits have been metí but the supply of money has not been increased, as it has been here, to the point where the public and the banks
have large emoünts of tmused funds. Both the discount rate of the Benfe of
England and market rates of interest remain higher in England then the corresponding rates in the United States.
Bank of Sagland*s discount rate
is 2 per cent m compared uith 1 per cent at the federal Keseive Bank of Mew
York, and the prevailing rate for industrial end comercial loans is around
4 1/2 per cent in Bartend ctEspared Hîith m eversge of about 3 per cent for
banks in leading cities in the United States»
fhe experience of the United Stetes since 1952 so far as
sale prices is concerned has not differed much from that of Baglsnd end
Sweden» Earlier in the depression prices fell further in the United States.
Différences between developments in this country and those in Sa gl end end
Sweden* however* are not attributable to more stiimlative policies pursued
by the central beaks of these ootmtriee, since their policies heve in fact
been less stimulative, jM&e differences ere the consequences of broadly
differing economic situations. A comparison of price raovesients in the three
countries is shorn below;
m e i imacss
{ m m # loo)
United States
United Kingdom
Sweden
1932
68
75
78
1957
91
98
98
1938
83
S9
93
F ULE
Boti* Tmm
- 5 -
C9 Oliver
I should si so like to explain ths differences betwaen the
esaount of det^and denosits se ahom in the Board1 e statement end in
ycur letter. Tne differences ari se in part from the exclusion from
yonr flgures of deposi te of State and locai governments isti eh have in*
crèased by about 11,000,000,000 since 1929. Since these deposita are
generally taeed ss actively se deposita of individuale mè corporations
they are included in our total of domand deposita» ibaother difference
is that the Board*e figureis adjusted to esclude the emount of cash
itesas held by bsnks in groeeas of collectlon, i&icb represent cheeks
drara on deposits but not yet debited and, therefore, funds not avail©ble for tvrther use* These deductions were about #700,000,000 largar
in June 1929, mkm deposits mv& aetive, thsn in Beeember
principal difference, howerver, ari ses from the fact that your finire
for 1933 refers to the end of June ^hile the Board*s figure refers to
the end of Deceder. In the six snonths from June to Becember 1938 there
wae an increese of $1,600,000,000 in de&and deposits ©t banks» Ihatever
figuree are used, however, it is clear that the mount of deposita was
larger in 1928 than in 1929, ìshile prices were 20 per cent lower» ^ ^
Very truly >*oura,
SU S. Eccles,
Chaiiman*
Ehclosure
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@FedFRASER