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VOL. 73 NO. 3 BERNANKE: GREATDEPRESSION 273 however, the combination of lender reluc- tance and continued debtor insolvency in- terfered with credit flows for several years after 1933. Evidence of postholiday credit problems is not hard to find. For example, small busi- nesses, which (as I have noted) suffered dis- proportionately during the Contraction, had continuing difficulties with credit during re- covery. Lewis Kimmel (1939) carried out a survey of credit availability during 1933-38 as a companion to the National Industrial Conference Board's 1932 survey. His conclu- sions are generally sanguine (this may reflect the fact that the work was commissioned by the American Bankers Association). How- ever, his survey results (p. 65) show that, of responding manufacturing firms normally dependent on banks, refusal or restriction of bank credit was reported by 30.2 percent of very small firms (capitalization less than $50,000); 14.3 percent of small firms ($50,001-$500,000); 10.3 percent of medium firms ($500,001-$1,000,000); and 3.2 percent of the largest companies (capital over $ 1 million). (The corresponding results from the 1932 NICB survey were 41.3, 22.2, 12.5, and 9.7 percent.) Two well-known economists, Hardy and Viner, conducted a credit survey in the Sev- enth Federal Reserve District in 1934-35. Based on "intensive coverage of 2600 indi- vidual cases," they found "a genuine unsatisfied demand for credit by solvent bor- rowers, many of whom could make economi- cally sound use of working capital .... The total amount of this unsatisfied demand for credit is a significant factor, among many others, in retarding business recovery." They added, "So far as small business is con- cerned, the difficulty in getting bank credit has increased more, as compared with a few years ago, than has the difficulty of getting trade credit." (These passages are quoted in W. L. Stoddard, 1940.) Finally, another credit survey for the 1933-38 period was done by the Small Busi- ness Review Committee for the U.S. Depart- ment of Commerce. This study surveyed 6,000 firms with between 21 and 150 em- ployees. From these they chose a special sample of 600 companies "selected because of their high ratings by a standard commer- cial rating agency." Even within the elite sample, 45 percent of the firms reported difficulty in securing funds for working capital purposes during this period; and 75 percent could not obtain capital or long-term loan requirements through regular markets. (See Stoddard.) The reader may wish to view the American Bankers Association and Small Business Re- view Committee surveys as lower and upper bounds, with the Hardy-Viner study in the middle. In any case, the consensus from surveys, as well as the opinion of careful students such as Chandler, is that credit dif- ficulties for small business persisted for at least two years after the bank holiday.33 Home mortgage lending was another im- portant area of credit activity. In this sphere, private lenders were even more cautious after 1933 than in business lending. They had a
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