Business: What Easier Credit?

For the fourth time in five months, the Federal Reserve last week eased the U.S. credit supply. To Reserve districts in New York, Chicago, Philadelphia, St. Louis and Minneapolis, Chairman William McChesney Martin and his governors gave permission to drop the rediscount another ½% (to 1¾%) on loans to member banks, and sliced bank reserve requirements. Thus the FRB released a potential of $2.7 billion in new credit into the nation's money stream.

Partly, FRB acted to relieve a sharp $600 million drain on bank reserves caused by heavy purchases of gold by foreign nations, largely Great Britain, whose exchange position has...

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