STATE OF BUSINESS: A Pinch in Time

In the midst of unsurpassed prosperity, money was scarcer in the U.S. last week than at any time since the Depression. Major U.S. banks, struggling to meet the massive demands of business for plant expansion, increased the prime rate (minimum interest charged the biggest, most reliable borrowers) from 3¾% to 4%. By upping the price of money to the highest level it has reached in 23 years, bankers hoped to stretch available credit to satisfy the pyramiding requirements of established customers. Smaller businessmen will be paying at least 5% for loans, while many companies that have not set up lines...

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