There were plenty of signs last week that tight money is beginning to loosen. The Treasury Department's costs for floating its 91-day bills edged down for the second week, stood at an average 3.528%. Furthermore, interest rates on bankers' acceptances, i.e., a form of short-term commercial loans, have dropped in the past month from 4% to 3.75%.

The demand for long-term money—which a few months ago had raced far ahead of supply—was being pinched off by high interest rates. Businessmen still wanted to expand, but they were so hard-pressed to find the funds—and so reluctant to pay the steep interest—that...

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