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BOARD OF GOVERNORS
DF THE

FEDERAL RESERVE SYSTEM

Office Correspondence
Xo

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Date, Aug^t 22,
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According to the Securities and Exchange Commission,
corporations at the end of 1943 held 38•& billion dollars of
liquid assets, divided between 22*6 billion of cash and 16 billion
of United States Government securities• Mr. Roland Robinson
estimates that at the end of 1 9 ^ the total liquid assets of
corporations will have increased further by J billion dollars•
This amount will include perhaps 21*6 billion dollars of cash
and 2I4. billion of Government securities• During I9I4.5, liquid
assets of corporations may increase further by about 2 billion
dollars, with probably all of the increase in Government securities* During I9I4.6, however, there will be a decline of
perhaps !j.«5 billion dollars, probably all in Government
securities. This decline will result principally from the
fact that tax payments will be in excess of currently accruing
tax liabilities* These forecasts of liquid assets assume (1)
that the European phase of the war is over at the end of this
year and the Pacific phase at the end of I9I4.5, (2) that war
expenditures will decline to an average of 5 billion dollars
a month in the second half of I9I4.5 and to 2 billion a month
in the second half of I9I46, (3) "that the conversion from war
to peace production will be smoothly handled, and (1+) that
private capital formation will increase in I9I+5 and 19^6 and
in the latter year will be well above the level of any prior
year except 19U1