Quite aside from the still theoretical question as to whether the United States is foolishly gathering majority control of a metal that may cease to have any monetary value at all, there is the pressing problem of excess bank deposits which our gold imports are creating. As of September 28, 198 (atest available), total deposits of all banks in the country were $52,- 611,000,000, or only $1,191,000,000 less than-on-Jume 30,1929. In this same period, however, loans and investments. have declined, from $58,474,- 000,000. to $48,304,000,000.
This enormous shift, in the ratio of deposits to loans and investments remains the greatest. Jong-term bull argument on American stock prices. The potential expansion of bank deposits is so vast that it constitutes an. explosive force in the, economic picture in the event that confidence should again return and business start expanding.
The figures for total deposits plus outstanding currency in relation to loans are even more startling, especially when 1929 and 1939 totals are compared. As yet there has been almost no expansion in either bank loans or bank investments, exclusive of investments in Government securities. Taking the figures for all member banks, security Joans at the end of 1938 were $3,500,000,000 or within $200,000,000 of the lows of the post-1922 period. Commercial loans at $7,000,000,000 were less than $1,500,- 000,000 above the depression lows and compared with an average of $12,- 000,000,000 in the decade prior to 1930.
Text read from the printed page and cleaned; old type leaves the occasional error.