After two months of seesaw argument and close study, the Federal Reserve Board took another sounding of the U.S. economy last week and gently started loosening its credit reins. In the biggest buying since March, FRB went quietly into the open market, added $196 million to its holdings of Treasury bills (maturing in 90 to 92 days), thus released more bank funds for loans to busi ness. As one result, the highly sensitive Treasury bill interest rate dropped from 2.7% to 2.6%.

Characteristically, the Federal Reserve and its Chairman William McChesney Martin Jr. said little about the operation, but the...

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