STATE OF BUSINESS: Cut in Margins

The Federal Reserve Board, which long ago relaxed or dropped special requirements for down payments on houses, appliances and other consumer goods, last week did the same for the stock market. It cut the margin (i.e., cash payment) required of stock-market investors from 75% to 50%—back to where it was before Korea.

The high margin was not needed, since most stock buying has been for cash. Outstanding credit on stocks last week was only a mere 1.8% of the total value of listed stocks. By making it easier to buy, FRB hoped to...

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