Publications of National Monetary Commission Volume 24

Publications of National Monetary Commission Volume 24

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This historic book may have numerous typos and missing text. Purchasers can usually download a free scanned copy of the original book (without typos) from the publisher. Not indexed. Not illustrated. 1910 edition. Excerpt: ...for loans--and so to compel a resort to the other basis--credit; while at the same time, and by the same action, it reduces the basis for granting credit. The result is a check on business expansion, perhaps an actual reduction of business activity. It is sometimes said that if the Government would pay its debts so as to avoid havingasurplus on hand, the evil effects of the independent treasury in alternately contracting and expanding the currency would not occur. This statement is hardly correct, because it overlooks the characteristic feature of the system, which is its irregularity of action. The receipts of the Government fiow into its vaults in a continuous stream, while payments are periodic. It receives money every day, but the bulk of its payments is made every three months. It must gather beforehand a sufficient amount to meet its payments. That means that for three months money is being Withdrawn from circulation, and that at the end of the quarter it is thrown back into circulation and into the banks all, or nearly all, at once. In this irregularity " of action on the money market lies the harm of the system. If it be said that the payments made by the Government at the end of every three months amount to a small sum compared with the total circulating medium, and therefore can not have any important efiect on business, the argument is conclusively answered by the evidence of experience. It can not be admitted that the disbursements of the Government are so insignificant as the statement seems to assume. To assert that such changes in the cause will not materially affect business, is to assume that, other things being equal, the rate of interest in the money market will not vary with the amount accessible to borrowers, more

Product details

  • Paperback | 92 pages
  • 189 x 246 x 5mm | 181g
  • United States
  • English
  • black & white illustrations
  • 1236753410
  • 9781236753410