Evening star., 1923-07-15
ENORMOUS BANK
LOANS REPORTED
Reserve Board Discovers
Mad Rush to 369 Banking
Institutions for Funds.
BIGGEST LOANS IN EAST
Most Remarkable Movement Ever
Noted Here-Huge Sums Put
Into Stocks.
BIGGEST LOANS IN EAST
BY HARDEN COLFAX.

The entire Atlantic seaboard. from
Maine to South Carolina. rushed to
the bank to borrow money during
the past two weeks, according to re-
turns to the Federal Reserve Board,
made public yesterday, from the 369
chief banking institutions in the ter
ritory affected.
The amount of money lent by
these banks during the fortnight ag-
gregates more than SITS, 100000 on
new loans. This is at the rate of
about Sl5,0O0,000 for every business
day of that period and stands as a
new high record.
Great Wave of Borrowing.
The boards returns show that the
wave of borrowing swept inland as
far as Kansas City. At Cleveland
the force of the movement was so
loans was extended by banks of
that reserve district. BY the time
the wave had reached Chicago. how
ever, the boards compilation shows,
its strength had waned consider
ably. New loans in that reserve
district during the two weeks totaled
less than $4,000,000, while at Kansas
City the wave dribbled in with a
comparatively puny total of $4,000
900 in new loans and disappeared,
entirely spent.
Elsewhere throughout the country
during the same time borrowers not
only failed to increase their obli-
cations. but actually reduced them.
The movement is one of the most
remarkable ever noted in Washing
ton. Here is the story of increased
borrowings in a nutshell:
Some of Biggest Loans.
Forty-five banks throughout New
England lent borrowers an addi-
tional s21,s53,000 during the two
weeks.
One hundred and nine banks in
New York city and locally increased
Fifty-five banks in Philadelphia
and other territory in the third fed
eral reserve district increased their
loans $3.4S3,000.
Eighty-two banks in the fourth fed
oral reserve district, with headquar-
terS at Cleveland, increased their
loans s29,10S,0O0.
Seventy-seven banks from Balti-
more to South Carolina reporting to
the Richmond Federal Reserve Bank
increased loans $3.766,OOO
One hundred and six banks in the
Chicago district increased loans
$3.6S6. 900.
seven banks increased loans s2.0S8,-
600.
Large sums Paid Back.
Against these increases stand the
repayments of borrowers in five fed
eral reserve districts. resulting in a
reduction in loans as follows:
Atlanta district, thirty-nine banks.
a. reduction of $1.471,000; st. Louis
district, thirty-six banks, reduc-
tion of s6.995,OOO; Minneapolis dis
trict. twenty-nine banks. reduction
OF S3.S71,000; Dallas district, fifty
two banks a reduction of S1.71S,OOO:
San Francisco district. sixty-six
banks, a reduction of $S.409, 900
with the heavy increase in bank
loans, the total stands today, accord
$4,000, 100000, an increase of s622'-
100000 within six months and Of
more than $1,000, ,000. 900 within q wear
ihese hgures represent the CONT ed
loans of 713 of the largest banks in
the chief cities of the United States
They are veering rapidly toward the
h1gh mark set in 1920. just prior to
the period of economic readiustment
out nave not vet come near the dan
ger line.
Money Put In stocks.
mere did the money go? The an
swer, as indicated by the boards
aou,atlon; Is almost as startling as
tne 1act itself. 1t appears to have
gone, to the extent of between GO and
30 per cent. into the stock market
W hlie there is no absolute proof of
TINS, the indications all point TO that
.pIiciusioh. Ihe inference is based on
tne character of the loans as dis
crossed in the boards reports
New fork's 109 banks for instance
lent s119,544.O00 on stocks and bonds
uurLhs the two weeks-an unusually
nigh total even for roaring huu -, a,
kets when the public is buyin.r ,ina ita
drunken sailor. Other kinds of loans
in the New York district barai,
moved. Half of the new loans Of tbs
new England banks were made on the
same sort or security. the other half.
apparently. to satisfy the lepitimata
requirements of business ronsarve
1--WE Philadelphia lent but measIv
mutton on stocks and bonds. Anothar
mhiion was lent on government bends
e., n,cn may nave been hypothecated
LOT STOCK market purposes-and the
remainder seems to have Gov. a.,
business enterprises
BUT in Cleveland the stock marlat
appears TO nave made a heavy call
upon tne banks, for in that djstrict
SlS.0O0.000. or more than so nor go
or the total. was lent upon the sa.
curity or stocks and bonds. CLEVELAND
bankers appear to have been satiS
Heu WIN that form of security. for
they did not demand govarnm..
bonds, the report shows as coI,atarni
lor tne accommodation extended hor
roWers. Forty per cent of tho loans
~ Inat district went into business
The boards figures afford vir,u,I,.
no lnoeN as to the probable life of
the borrowing movement but there
appears ,,' 10 De no reason to believe il
w VIII soon De spent. Rather. II seems
to be acceleTating ei"s
Net Increase in Loans.
me net increase in loans for the
entfre country. s161. 200. 900 for tbe
two weeks, was divided in the ratio
or sooo0o.00o for the first week of tbe
fortnight. and $1o1 900. 900 for the sec
tatnd onn. were that ratio to be main
taIneu i0r two weeks more-which is
regarded as somewhat unlikely bars
.ne :. ngures would show borrowings
Copyright. 1921