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The article discusses the portfolio operations of commercial banks and the level of treasury security prices. The author states that the pattern of commercial bank holdings of U.S. Treasury securities seems to be related to changes in the volume of bank loans. He suggests that this leads to a connection between downturns in general business activity and expansion of Treasury holdings within commercial banks. The article also discusses the relation between federal reserve policy and the portfolio operations of commercial banks in the Treasury securities. Several tables are provided to help illustrate the study.