The coal strike will create new shortages, but it is too early to tell how severe these will be. Excessive inventories and the need for inventory realignment appear to be on many businessmen's minds. Excessive inventories are the result of both declining sales and the easing of shortages. Concern over shortages has dramatically given way to attempts to reduce inventories, according to Chicago's report. In the Kansas City District, the attempt to reduce inventories was one reason cited for the flatness in bank loan demand.
Most Districts report that loan demand has begun to ease.
Philadelphia notes that loan commitments have fallen both because of a decline in demand as well as more restrictive lending policies by many banks. Business loan demand appears to be off the most. San Francisco indicates that many large borrowers are returning to the capital markets. Minneapolis is the only District reporting continued strong loan demand because of agricultural borrowing. Inflows to time and savings accounts at commercial banks are beginning in many Districts.