361 
Do these characteristics and tendencies find a counterpart in 
the money market as measured by interest rates charged by 
banks on customers’ loans? 
Dr. Frederick C. Mills, by using data showing by cities the 
prevailing rates charged by member banks on prime commercial 
loans, finds certain regional differences which he summarizes as 
follows :17 
INTERPRETATION 
GROUP 
AVERAGE RATE ON 
CusTOMERS’ Loans 
(1022-1026) 
Cities of the Middle Atlantic and Northeast (Boston, Phila- 
delphia, New York, Buffalo) .......................... 
Cities of the Upper Mississippi (St. Louis, Chicago, Minneap-| 
olis, Detroit, Pittsburgh, Cincinnati, Cleveland). ........ 
Cities of the South (Baltimore, Richmond, Atlanta, New 
Orleans, Louisville, Birmingham, Jacksonville, Nashville). . 
Cities of the Pacific Coast (San Francisco. Portland, Seattle, 
Los Angeles, Spokane)............ CC eee 
Cities of the Western Plains and Rocky Mountains (Kansas 
City, Omaha, Denver, Salt Lake City, Helena).......... 
Cities of the Southwest (Dallas, Houston, Little Rock, Okla- 
homa Citv. Fl Paso. . .. 
2.12 
5.40 
5-86 
6.12 
6.32 
65.35% 
From this summary the Annalist concludes: 
“The differences between cities and between the various groups of 
cities . . . . represent variations in the degree of commercial develop- 
ment and business stability, differences in the amount of available 
credit, and differences in the intensity of the demand for capital and 
credit, as well as the variations in local business conditions and banking 
habitg 2718 
By using the basic data compiled by Dr. Mills for 34 cities for 
each of the years 1922-1926, the median rate for the entire period 
's found to be 5.71. By using this amount as a standard of ref- 
erence by which to divide the cities into three groups—the bases 
of classification being their own median rates for the years 1922- 
1926 compared with the median rate for all cities—and then by 
arraying them by the sizes of the differences from type, it is seen, 
as indicated in Table 204, that the rates vary by the location 
and by the size of city, and that the differentials persist from 
year to year. Moreover, they are high or low, relative to their 
17 Reported in an article, “Regional Differences in Discount Rates,” The Annalist, 
July 20, 1927, p. 171. The basic data used by Dr. Mills are published currently 
in the Federal Reserve Bulletin. 
\8 Thr pit