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Since the outbreak of the European war, the flow of rupee coins back from circulation to reserves, which has been going on for many years, has been reversed. The stock of rupee coin in the Reserve Bank of India has decreased, while circulation has increased, between September 1939 and July 1940. This increase of coin circulation has been due partly to the proportional increase of note circulation and to some tendency to hoard coins in preference to notes. To avoid exhaustion of the Reserve Bank's supply of coin, the government of India began the issuance of 1-rupee notes. In December 1940, it announced a reduction in the fineness of the rupee from 11/12 to 0.300. It remains to be seen whether this section will be acceptable to the population.

This article examines the practice of the federal reserve banks in requiring eligible or near-eligible paper as so-called "marginal" or "additional collateral," to paper discounted by them, in contradistinction to advances on member bank' notes payable collateraled by United States securities or eligible paper. As a setting for collateraled discounts, the history and purposes of collateraled advances are stated, as well as the reasons for the ascendancy of such advances over discount. In their publications the federal reserve authorities fail to acknowledge any difference between (1) rediscounting and (2) allowing advances against eligible paper pledged; nor do they report separately the absolute or relative amount of discounts to which "additional collateral" is required, nor the "margin" required, nor the number of members putting up such margins, nor any other data relative thereto. There are no provisions in the Federal Reserve act or regulations for the practice; and yet it is no mean method of credit control. The reasons offered by the reserve banks for the practice are: (1) to repress excessive borrowing by the applicant member, in the Interest of the reserve bank, of the applicant member, or of the system as a whole, using this device as a supplement to credit rationing, discount rate variation, and moral suasion; (2) to increase the protection to the reserve banks themselves for credits granted; (8) to compensate for the less rigid insistence by the reserve banks on technical qualifications in credit granting and thus to make possible greater extensions of credit to members than can be had on the strict merit of the paper offered for discount; and (4) to acquiesce in greater degree to the traditional methods of Inter-bank finance and to break down the isolation of the reserve banks from the business and financial world. Each of these reasons is examined and criticized. [ABSTRACT FROM AUTHOR]

When the federal reserve system was established, elaborate precautions were taken to provide for the elasticity of the federal reserve note. The original plan of issue ailed for the use of rediscounted paper as collateral, and the process of issue and retirement was tenuously connected to member bank borrowing. The original plan has been almost entirely abandoned through statutory changes made in response to alterations in monetary and banking practices and structures. The tremendous growth of the gold stock has been of particular significance. The collateral requirements have been modified, and note issue has been divorced from member bank borrowing. The elasticity of the federal reserve note has not been impaired, which suggests that the correct explanation of note elasticity is to be found in the rôle which cash plays in the monetary system rather than in collateral requirements. Vestiges of the original plan of note issue remain and constitute a potential source of embarrassment to the monetary system. [ABSTRACT FROM AUTHOR]

The article presents a diversity of recommendations of monetary policy. Several policies ended by one speaker are rejected by another. Most of the policies followed by U.S. President Franklin D. Roosevelt Administration are rejected. There is little sympathy with the stagnation doctrine, with government spending on a long-time basis, with promoting recovery by easy money or with giving monetary policy a dominant role in control of national economic activity. With the total volume of eligible paper in the portfolios of the Federal reserve banks amounting to only 3 million dollars, out of total assets of 19 billion for the Federal reserve banks and of 74 billion for the banks of the country and with excess cash and bank balances of 16 billion dollars and no likelihood of members borrowing from the reserve banks in the near future, it is difficult to see how any control can be exercised by qualitative considerations. To enforce the rule that banks match their total demand deposits by cash and self-liquidating paper and dispose of the non-self-liquidating loans and investments in excess of their savings deposits would be ruinous to the banks. Finally, it is becoming increasingly clear that unless taxation and labor policies, in particular, are harmonized with public investment policy, the latter can do but little to promote a higher level of private investment.

The article throws light on the papers of James Harvey Rogers "The Absorption of Credit." Rogers paper was a mathematical development showing that an addition to its reserve bank didnot result in increasing that individual bank's deposit liabilities by ten fold. The increase of reserve and increase of deposits were substantially equal and that the pyramiding occurred through the overflow from the individual bank to the other banks. Rogers demonstrates that such overflow from the banks receiving the funds would, in turn, cause an overflow from these to which the funds were communicated, and so on. He demonstrated that, as a result of such converging series, equilibrium would be reached when the additional deposit liabilities of the banks as a whole had become ten times the additional aggregate reserve. All of this was developed on the assumption that the general expansion of loans and deposits led to no outflow of cash to circulation. Rogers also showed a substantially similar result as to loans and discounts. He further applied the theory reversely to deductions of funds instead of additions. In other words he showed how both inflation and deflation work cumulatively and how different was the initial effect on the individual bank from the final effect on banks as a whole.

The article presents some abstracts of published materials concerning money, credit and banking and monetary policy. The paper entitled "The Role of Monetary Policy," by M. Friedman presents a professional opinion on the role of monetary policy which has fluctuated widely from great confidence in the potency of monetary policy in the 1920s to widespread belief that monetary policy is of negligible importance, to a revival of belief in the potency of monetary policy. The abstract entitled "Competition and Efficiency in the Banking System: Empirical Research and Its Policy Implications," by S.I. Greenbaum discusses recent bank cost studies with a view toward assessing their potential importance as well as their achievements. The paper concludes with a discussion of selected topics of banking structure research outside the area of cost analysis. The paper entitled "Risk Aversion, Financial Intermediation, and the Term Structure of Interest Rates," by H.I. Grossman investigates theoretically the determination of the equilibrium difference between expected holding period yields on government debts of different maturities.

The article presents several abstracts of research papers related to money, credit, banking, monetary policy and consumer finance. The first paper "On Problems of Suppliers' Credits," by N. Bischof and W. Birnbaumer, shows that the volume of suppliers' credits is largely independent of the volume of bank credits. The second paper "Inflation and Growth: The Statistical Evidence," by G.S. Dorrance, finds that most statistical examinations of the relation between inflation and growth have tended to be inconclusive, partly because the rate of inflation is only one of the factors influencing the rate of growth in any country. This paper contains an examination of the available data, stratified to recognize the effects of wealth on rates of progress. The third paper "Some Statistical Analysis of the Long-Term Rate of Interest in the U.K.," by J.L. Ford and T. Stark, considers the long-term rate of interest in the post-war U.K. economy in the light of the liquidity preference theory, giving full weight to other liquid assets as well a to the Keynesian liquid assets.

This section presents abstracts of articles on industrial location and foreign currency published in the August 1965 issue of The Canadian Journal of Economics and Political Science. The paper Trends in the Location of Industry in Ontario, 1945-1959, by Keith A. J. Hay discusses that the process of economic development invariably produces changes in the regional pattern of industrial location. These changes can be traced over time by an examination of the spatial distribution of manufacturing input and output. This method of analysis may be used to answer certain questions concerning the relative concentration of industry between rural and urban areas, changes in aggregate production relationships and the sensitivity of regional locational trends to change in growth rates in the national economy. On the other hand, the article titled The Foreign Currency Business of Canadian Chartered Banks, by Ronald A. Shearer draws together available information on the foreign currency operations of Canadian chartered banks, including some data on interest rates which are not otherwise readily available. The paper is largely descriptive and institutional. It does extend previous analyses of the forces which have influenced the growth of foreign currency operations and it explores some of the domestic implications of these operations.

In this article Nelson W. Aldrich, Senator, U.S. suggests the plan for monetary legislation. The plan of Senator Aldrich contains a valuable provision designed to meet contingencies. By special vote of the executive committee and with the approval of the secretary of the guaranteed by the local association and secured by the deposit with it of securities taken at two thirds of their market value. Under the terms of this clause it will be possible to assist threatened banking institutions, following the precedents established by European central banks and our own clearing-houses. If the Reserve Association is to serve a useful purpose it should be clearly understood by the public generally as well as by bankers that it is not to be one of its functions to contribute largely to the aggregate amount of credit regularly at the disposal of borrowers. It is, however, most doubtful whether the resources of the Bank proposed by Senator Aldrich would be adequate even for this purpose. Far from tending toward any considerable amount of credit expansion it may prove that its resources will be so limited that practically all of them will be held in reserve to meet emergencies.

This article presents information on the plan presented by the U.S. senator Nelson W. Aldrich on bank Co-operation. Senator Aldrich has presented to the National Monetary Commission a plan by which banks may cooperate much as they have on occasion cooperated through their clearing houses, but far more generally and effectively. The national banks are to organize the Reserve Association of America, with certain banking functions. Bankers who wished to get out of the Reserve Association could liquidate, collect for their stock and organize new banks that would not join the Association. One half only of the subscription is to be paid in at the outset, the rest is subject to call. The plan clearly provides adequately for such representation. The boards of directors will be thoroughly representative of the stockholding banks, for three fifths of the directors are to be chosen by majority vote of the member banks, each bank, large and small, casting a single vote. The remaining two fifths of the directors, however, are to be chosen by stock representation, each bank casting as many votes as it holds shares in the Association. The chief function of a local Association is to guarantee for a commission the commercial paper its members may wish to rediscount at the district branch of the Reserve Association.

The article presents a comment on a paper by Daniel Orr and W.G. Mellon in which they present an analysis of expansion of bank credit that introduces uncertainty into the model of bank decision-making. According to the author, certain aspects of their model and discussion of it are subject to criticism. First being that their results depend upon the assumption that the return on funds that are lent out or invested does not exceed the charge a bank incurs when it borrows funds to cover losses. The applicability of Orr and Mellon's model to banks in the U.S., where the Federal Reserve frowns on borrowing reserves to make a profit, is unclear. Even more important, is the fact that banks in various other countries where no prohibition against borrowing to make a profit is in effect, have never been observed to expand credit indefinitely though the rate on loans has exceeded the bank rate on many occasions. Orr and Mellon's discussion of what uncertainty implies about the creation of money by a many-bank banking system is also unsatisfactory.

The article presents a critical discussion of the papers by Seymour E. Harris and John V. Van Sickle on interregional competition and economic adjustments. According to the author Harris has developed his topic in a most interesting and stimulating fashion. He is to be complimented for this able presentation of the difficulties facing the Northeast in its attempt to maintain its competitive position in the U.S. Harris appears at the outset to favor the regional adjustment process of classical economics. After a brief description of this process, he contends that the expected adjustments do not take place or do so only after costly delays. Some policies of government such as banking policy and government relief and spending policies hamper adjustments, other policies that are classified as favoritism toward developing regions add to the burden of adjustment in the older regions. Harris' paper represents an important addition to interregional economic analysis, with particular reference to an area in which much investigation already has been undertaken.

This section presents abstracts of research and articles on money, credit, banking; monetary policy, consumer finance and mortgage credit. In the paper Money Supply Theory and the Money Multiplier, V. Argy attempts to derive a simple money supply function and to combine it in a Keynesian type general equilibrium model. variables in the money supply function are income, the rate of interest and central bank liabilities. The article Changes in the Money Supply in the United Kingdom 1954 to 1964 by G. J. Bell and L. S. Berman presents a comprehensive statistical framework for analyzing the impact of government borrowing operations, the balance of payments position and the banking sector's lending operations in the money supply. G. C. Chow studies the empirical issue of the relative importance of transactions demand and assets demand, and the theoretical distinction between long-run and short-run demand in the paper, On the Long-Run and Short-Run Demand for Money. The article Control of the Money Supply by A. B. Champ contends that the validity of this proposition that control of bank cash is necessary and sufficient to achieve control of bank deposits is confined to the unrealistically simple conditions of the theoretical models by which it is usually defended.

The article discusses the abstracts of several papers on economics published in the December 1965 issue of the "Journal of Finance." The first paper of the journal is "Market Pressure on Price From the Sale of Large Blocks of Stock," by Harry G. Guthman and Archie J. Bakay. This study was made to discover the market impact of common stock offerings that exceeded $10 million each, including both public offerings and secondaries, during 1949-1964. The second paper "The Response of Banks to Changes in Aggregate Reserves," by C. Rangarajan and Alan K. Severn, opines that the effectiveness of monetary policy depends in part on the control of size and of timing exercisable by the central bank. The third paper of the journal "On Measuring Fiscal Policy," by Joseph Scherer, focuses on the concept of fiscal policy. The fourth paper of the journal "Tax Law, Lock-Ins, and Bank Portfolio Choice," by William F. Beazer, uses only price movements and total portfolio value in deriving a theory of optimal loss-gain transactions. The fifth paper is "Security Prices, Risk, and Maximal Gains From Diversification," by John Lintner.

This article presents a discussion on the research paper "The Demand for Money: Some Theoretical and Empirical Results," by Milton Friedman, a professor at the University of Chicago. In his paper, Friedman has dealt with the demand for currency, demand deposits and commercial bank time deposits without any reference to the demand for close substitutes for those things. For example, deposits in mutual savings banks and savings and loan associations for households and holdings of Treasury bills for businesses. This does not seem consistent with the approach which Friedman himself took in his restatement of the quantity theory. However, the real contribution which Friedman makes is the proposition, that the demand for liquid assets, at given interest rates, does not decline in proportion to the decline in transactions during cyclical movements of income. To mention only one consideration, it seems clear that a large part of the demand for liquid assets stems from a desire for protection against the variance of the difference between cash inflows and cash outflows.

The article discusses the abstracts of several papers on economics published in the August 1965 issue of the journal "Bulletin of Economics and Statistics." The first article is "The Territorial Incidence of the East African Common Services," by Arthur Hazlewood. It attempts to assess the balance of benefits of various common services for each of the three East African countries. The second article "Is Britain's Worsening Trade Gap Due to Bad Management of the Business Cycle?" by P.M. Oppenheimer, refutes the view that Britain's trade gap has gotten bigger over the past decade because of the increased speed of successive cyclical upswings. The third article "The Genesis of Bank Deposits: New English Version," by R.L. Crouch, elucidates the process whereby surplus reserves are eliminated by the banks and also specifies the forces generating surplus reserves within the banking system. The third article "Soviet Living Standards," by P. Hanson, compares Soviet and British living standards in 1964 and 1965.

The article comments on two papers about money and banking by C.R. Whittlesey and Karl R. Bopp respectively, which have been published within the issue. It is viewed that these two papers have raised several questions regarding the future of the U.S. society. It is opined that both Whittlesey and Bopp were confident of controlling the business cycle through changes in the quantity of money.

The article presents summary of articles present at a round table conference on banking reform through supervisory standards. Homer Jones, in his paper, stated that there are no codified uniform statements of the rules and procedures of bank supervision. Their appraisal depends upon learning something of these rules from their very limited legal basis, from the traditions of the supervisory agencies, and from observation of supervisory operations over a period of time. Two aspects of bank supervision have been of chief interest since the reorganization period after the holiday. Allegations have been made that the influence of bank supervisors has helped to retard the extension of bank credit and consequently the recovery process. Ronald I. Robinson, in his article, expressed that bank examiners apparently can influence the quality of bank loans and investments and the practices in acquiring, handling and collecting such assets. They apparently can also influence the extent to which banks keep liquid. In his paper, Robert G. Rodkey stated that the traditional emphasis in bank examinations has been on technical routine matters with only incidental attention to general policies. Sound general policies are usually accompanied by sound assets, and general policies can be sound only.

The article analyses the deposits by the individual banker, which is consider as a means of conducting a sound baking business. Business or commercial accounts result from borrowings by corporate and other enterprises which are negotiated through an exchange of business paper for bank credit. The bank's reserve problem is largely concerned with these since business accounts are fluctuating and active, highly sensitive to slight changes in business conditions and in public confidence. In the first place, not all business deposits result from borrowings by business enterprises. The larger corporations of the country have not been, generally spreading, greatly in debt to the banks for several years past, yet many of them have maintained large, often excessive, bank balances which would certainly be classified as business deposits. Business deposits are often highly sensitive to changes in public confidence. It is the savings and income accounts, on the whole, which have been withdrawn during this past year in large amounts, while business deposits have been much more stable. It should be added, however, that if bank failures continue on a wide scale, business concerns, as well as individuals, will be increasingly likely to withdraw their accounts and hold currency or gold.

Highlights documents and reports concerning money, prices, credit and banking as of March 1917. Topics of the reports; Agencies responsible for the publication of the documents.

The article presents information about papers published in different periodicals on topics like general economics methodology, price and allocation theory, income and employment theory, related empirical studies, history of economic thought, economic history, economic development, national economies, statistical methods, econometrics, social accounting, economic systems, planning and reform, business fluctuations, money, credit and banking, monetary policy, mortgage credit, public finance, fiscal policy, international economics, business organization, managerial economics, marketing, accounting, industrial organization, government and business, industry studies, land economics, agricultural economics, economic geography, housing, labor economics, population, welfare programs, consumer economics and related disciplines. Some of these articles are, "The Relations of economic, political and Social Systems," by K.E. Boulding; "A Century of Change: Negroes in the U.S. Economy, 1860-1960," by M.A. Hayes; "Subjective Criteria in Income Distribution of the U.S.A," by R.J. Ward; "The Economics of Education in the U.S.S.R.," by S. Strumilin.

The exposition of the manner in which an individual bank expends credit as compared with the way this is done by the banking system as a whole, has remained virtually unchanged since its first presentation by professor C.A. Phillips in 1920. This exposition relies on a comparative static, deterministic analysis. Recently, important results have been obtained in other areas of economic theory through the incorporation of uncertainty into decision models. In the paper the author explores the potential effects of uncertainty in cash flows of banks on the expansion of bank credit. The analytic methods he uses are similar to those successfully employed to determine low-cost inventory policies for business enterprises. The author first considers the effect of uncertainty upon credit expansion in an individual bank. A member of Federal Reserve is subject to a legal reserve requirement, which is a certain percentage of average deposits over some period. Failure to meet this requirement results in a money penalty, but perhaps more importantly, repeated failures are regarded as evidence of unsound banking practice.

Charles C. Abbott's paper on the commercial banks and the public debt has tentatively proposed certain courses of action without insisting that they offer a final answer. This opens up topics for comment without being controversial. Abbott has directed his attention to the broader aspects of public debt management rather than solely to commercial bank government security portfolio management. He has properly stated that debt management for banks cannot be treated independently of other nonbank security holdings. He indicates the importance of debt management and has cited a number of questions which need to be carefully considered in formulating policy. He urges that the interest charges should be held down and that the debt should be managed in such a way as to prevent it from becoming a factor of instability in the economy. He rails attention to the fact that a public debt may serve some beneficial public advantages. For instance, it may become a medium for the accumulation of savings.

The article presents comments of different economists on the paper regarding the future of the U.S. investment and the role of the Bretton Woods Bank written by various authors. According to Alice Bourneuf, he agrees that the four conditions stated by Mr. Eric Fellner are of fundamental importance. Some degree of political security, maintenance of reasonably high levels of employment by domestic measures, commercial policies which increase the adjustability of the flow of goods, and wise use of the Fund's power to approve changes in exchange rates are all necessary for continued stability. According to Ragnar Nurske, Dr. A. Gardner deals at some length with the problem of repayment and with the readjustment it will involve in the United States economy. Remote though this problem may seem to them in time, a demonstration of how it can be met may help to remove prevailing inhibitions on foreign lending. According to Henry C. Simons, he had enjoyed Mr. Imre de Vegh's paper. The differences between them are perhaps unsubstantial and, in any case, concern weighting and relative emphasis, not the validity of the broad considerations he has invoked.

The article discusses a paper "Management of the Public Debt After the War," by Simeon E. Leland, that was published in the June 2, 1944 issue of the journal "American Economic Review." Professor Leland's paper does not state specifically what should be done or when action should be taken. The first proposition for emphasis is that the men size of the debt is not crucial in determining its effects on the economy. Changes in its composition and in the holders of it may be of greater importance than changes in the quantity of debt outstanding. The possible shifts of securities between individuals, insurance companies, banks and the Reserve System are perhaps of more significance as well as of greater magnitude than any likely short-term changes in the size of the postwar debt. It is important to note that there can no longer be a passive debt policy in which inaction may be presumed to yield neutral effects. The very decisions not to initiate conversions or not to induce shifts in the type of debt holders are themselves forms of action. With the debt a large factor in a dynamic economy, it cannot at any time be ignored.

This article presents abstracts of articles on economics published in the June 1965 issue of The Economic Journal. The article Wages and Productivity of Labour, by L. B. Sheynin discusses that prices are not defined by costs of production, but that prices are a primary factor relative to wages. Wages and profits are ruled by the two principles such as lucrum cessans and fifty-fifty. Meanwhile, the paper titled Commercial Banks' Portfolio Behaviour, by F. P. R. Brechling and G. Clayton, represents an attempt to construct some simple theories of banks' portfolio behaviour and to estimate the most important parameters by elementary statistical techniques. This paper also provides simplifying assumptions. First, banks earn the same rate of interest on both investments and advances whilst liquid assets have a zero yield. Secondly, commercial banks are price takers in the sense that they are unable to influence the ruling rate of interest. Furthermore, in the article Investment and Discount Rates Under Capital Rationing - A Programming Approach, by William J. Baumol and Richard E. Quandt, the choice of an optimal investment program under multiperiod capital rationing is examined along with the appropriate discount rates to be used in discounting prospective earnings of the candidate investment projects.

This section presents abstracts of studies on finance which were published in the March 1965 issue of The Journal of Finance. The paper titled Factors Determining Bank Deposit Growth By State: An Empirical Analysis by Bruce C. Cohen and George G. Kaufman, identifies and measures the relevant structural and economic variables associated with deposit growth by state. The paper titled The Value of Pension Promises--A Major Source of Consumer Wealth Distortion, by Walter Williams, shows the distortion in the size of consumer wealth as reported on the balance sheets of the U.S. Securities and Exchange Commission. The paper titled Financial Flows Over Recent Business Cycles, by Sue N. Atkinson, analyzes the direction of the flow of funds accounts among sectors in the U.S.

This paper examines some general aspects of effects the war-generated increase in the supply of money and in the public debt may have on the monetary system and on monetary controls after the war. In the current fiscal year, 1943, commercial banks are expected to take 30 billions of government securities. If the war lasts another two years, the supply of money will be four times as large as at the peak of the 1929 boom. Retirement of debt will be slow even under the most favorable circumstances. From the viewpoint of individual wealth, bigger bank balances may mean progress in some cases, may be neutral or even associated with regress in others. When the cash funds of the individual rise because he is unable to spend his income on current consumption, he is saving and adding to his personal wealth. As war financing progresses, individual liquidity will reach a degree never before witnessed, unless inflation triumphs over price control. Individual liquidity of private persons could not have improved as forecast before incomes approached their limits, before living standards were adjusted to war conditions, and before restrictions on consumption became really effective. That liquidity is already on the increase is revealed by the June 30, 1942, bank statistics, which show the first substantial decline in loans of member banks since the summer of 1939. The decline in bank loans and investments in the private sector will offset some of the monetary consequences of their increase in the public sector.

The purpose of this article is to outline briefly the principal features of these contributions. The life of economist John Law, which ii already well known and is available in a number of good biographical sketches, is not repeated here. Neither his theories as expounded in Money and Trade Considered nor the practical operation of his system in Prance, since they have been adequately treated elsewhere will be discussed. In 1711 Law came to Turin, the capital of Piedmont. He obtained an audience with the ruler, King Victor, in March, 1711, and encountered no difficulty in interesting him in a project promising relief for a national treasury burdened with debts. With a strong government bank supplying the requisite money and credit facilities, Law told this ruler that Piedmont would gradually regain its former position as one of the leading commercial centers of Italy. The resources of this bank were to consist of the capital of one hundred thousand pistoles, all of which would be available by the end of the first year's operations, the funds of the Crown and the State revenues as they were collected, the private deposits of the people. As this specie was brought to the bank for deposit, bank notes were to be issued if desired by the depositor or evidence of deposit was to be given by pass book receipt which would not be circulated as money. In this private banking project Law stated explicitly that notes were to be issued only in equivalent exchange for coin deposits.

This article presents information on books related to money, prices, credit and banking. One of the books described is "Ten Years of Federal Intermediate Credits," by F. Baird and C.L. Benner. In 1920-21 political pressure was exerted to provide for credit needs of six months' to three years' duration, i.e., too long for federal reserve and too short for federal land bank accommodation. The book reviews intermediate credits prior to 1928, takes us through tortuous politics attending the Act, and concludes with the formation of intermediate credit banks. Furnishes detailed operating experiences. Confined to rediscounts, the intermediate credit banks have lent to banks, credit corporations, and cooperatives. With restrictions upon intermediate credit bank interest rates and upon those charged by discounters, operations were restricted to mostly riskiess paper, thereby limiting the usefulness of intermediate credit banks. Some other books enlisted are: "The Monetary Problems of India," by L.C. Jain; and "Silver: An Analysis of Factors Affecting Its Price," by Y.S. Leong.

The article focuses on state bank withdrawals from the federal reserve system in the U.S. Since May, 1919, approximately 60 state banks have withdrawn from the federal reserve system. Great significance has been attached to these withdrawals by certain writers. Some regard them as an indication of general dissatisfaction with the management of the federal reserve system. The author focuses on reasons for these withdrawals and to attempt to answer the question which has been raised as to what they signify. The Federal Reserve act as originally passed made no provision whereby state bank members could withdraw. This was one of the reasons why only 11 state banks had taken out membership by May 1, 1913. The Federal Reserve Board realized from the beginning that some provision for withdrawal would have to be made, if the reluctance of state banks to join was to be overcome. When, therefore, the Board issued its regulations governing membership of state banks on, June 7, 1915, it stated that withdrawal upon twelve months written notice would be permitted, but that no more than 10 per cent of the capital stock of any federal reserve bank should be canceled for. this reason in any one year.

The article focuses on the actual efficacy of changes in the discount policies of central banks in the United States and Europe. For many, this policy has confused the public opinion rather than clarifying it. The differences of opinion that arise are usually due to divergent views as to the stability of the current business situation and the probable developments of the immediate future. The discount policy of central banks may be discussed either from the point of view of actual efficacy, or conceding that, of general expediency and temporal wisdom. The effective opponents of advances in central bank rates of discount were usually as hostile to the idea of further credit inflation as were the spokesmen for higher rates. Two methods of contracting the money are, the amortization of government and municipal debt, and the other is the rationing of credit under the guidance of the bank of issue. Trained opinion in this country would seem to harbor a belief in the potency of the discount rates of the federal reserve banks, as an instrument of credit control.

This article suggests remedies for defects in the currency system of the U.S. by Nelson W. Aldrich, senator, U.S. Senator Aldrich contemplates the supply of an emergency circulation of bank notes. In that case his plan is open to the criticism of inadequacy. Unless a Reserve Association or Central bank is so organized as to supply the elastic element now lacking in currency system, many people will not consider it worth having. A much simpler and less expensive scheme could be devised for the supply of an emergency circulation. Furthermore, if one have such an institution, it could without serious difficulty be made to perform this function as well as others. It would not be safe for the Association to tie up any considerable portion of its resources in bonds, because in that case it would find difficulty in liquidizing them on the occasions on which its services as an emergency institution would be needed. Practically then, in ordinary times, the Association would serve as a middleman for the loaning of a part of its capital, the deposits of the government and that fraction of bank reserves left on deposit with it, to the banks at a low rate of interest.

The article presents discussion on the monetary aspects and interrelation between monetary developments and saving and investment. Institutions with varying functions for handling the public's funds have played an increasingly important role in influencing the rate and direction of money flows in the economy. Their impact on the volume and use of credit has become more closely similar to that of banks. Their potential influence upon the maintenance of economic growth and stability is very great. This has resulted in an increasing emphasis on the study of these institutions as an integral part of the study of monetary developments. The article focuses on the impact of controls on debt, and through them on the economy. Present general monetary measures-discounts, open market operations, and changes in reserve requirements-apply to commercial banks. They do their work through their effect on the reserves of commercial banks The impact spreads from banks throughout the economy, depending on the operation of the commercial banks under our so-called "private enterprise system."

Commercial banks have long been subject to a variety of special statutory or administrative prohibitions and compulsions in the management of their resources. Originally instituted to make banks safer for their note holders and depositors, these direct controls have also operated to limit both the total supply of bank credit and the initial uses for which such credit could be obtained. Legal or conventional cash reserve requirements have limited the proportion of its resources that a single bank might place in loans and investments and at the same time have determined how much credit banks as a whole could create on the basis of the available amount of reserves. Restrictions by statute, tradition or central bank rediscount policy against certain types of loans have long imposed qualitative or selective controls contents of a bank's portfolio of loans and securities. For example, national banks in the United States were barred completely from making loans on real estate until 1913 and even now are severely limited in their freedom to make unamortized mortgages. The implied rule of the commercial loan or real bills doctrine, that commercial banks should confine their extensions of credit to short term, self liquidating commercial loans on the ground that these alone are noninflationary in their monetary effects as well as safest for banks, was long embodied in a coercive tradition and in legislation and it still exercises a strong influence in making bank credit more obtainable for some uses than others. It will be recalled that the Federal Reserve Act originally restricted rediscounting to only short term, self liquidating commercial and agricultural paper and that the Act still specifically prohibits the use of Reserve bank credit for speculative loans.

The relations between the central bank and the State have been newly defined in central bank laws passed since the end of the war. However, there exists no comparative study of the postwar central bank legislation, no bird's eye view of the new institutional set-up, no comprehensive interpretation of the changing relationships between the central banks and the State. This broadly is what I shall try to do in this paper. [ABSTRACT FROM AUTHOR]

The aim of this paper is to examine the arguments for and the implications of the maintenance of the wartime pattern of yields on government securities. The pattern is roughly defined by three-eighth of 1 percent on 90-day Treasury bills, seven-eighth of 1 percent on one-year Treasury certificates of indebtedness, and two and a half percent on the longest term bonds. This is substantially the pattern which was adopted fortuitously early in the war to aid in financing the war by means of bank borrowing at low cost. The arguments adduced for this policy are inconsistent and are not convincing. The extension of this policy during peacetimes, particularly when full employment exists, implies the complete surrender by the Reserve System of quantitative control over the supply of money and eventually necessitates the curtailment of the present-day lending functions of commercial banks. Such a policy affords no satisfactory alternative quantitative basis of monetary control, which control is made to depend entirely upon the management of Treasury receipts and expenditures.

It is agreed by all competent observers that unusually complex problems will demand the attention of the banking authorities in the not-too-distant future. The question therefore arises whether even the most skillful administration can cope with such problems successfully under the limitations set by the antiquated and unreformed banking system. The purpose of this paper is to indicate the nature of existing defects in the banking structure and to offer a few suggestions for improvement. What the Board of Governors of the Federal Reserve System thought of the banking structure even before the recent war is comprehensively stated in the Board's annual report for the year 1938. This report bristles with such derogatory expressions as the "piecemeal" character of the development of the "mechanism of supervision," the "crazy quilt of conflicting powers and jurisdictions," "overlapping authorities," "gaps in authority," "diffusions of supervisory responsibility." But condemnations of this sort have not been any monopoly of the federal agencies.

Discusses abstracts of research articles on economics, published in the 1968 edition of the periodical 'Journal of Economic Abstracts.' Behavior of the demand for money; Liquidity traps for money, bank credit and interest rates; Evolution of banking systems; Money supply theory; Analysis of the attempt to relate money to growth; Objective of the monetary policy of Great Britain.

This article presents abstracts of research articles on finance. The paper "The Demand for Money in Denmark: 1921-62" is a study of the demand for money in Denmark using the aggregate stock of money, net national income and the rate of interest as the main variables. The method applied is single-equation regression analysis, and the relations are estimated for different periods and with various combinations of the variables. The article "Stochastic Reserve Losses" is concerned with the Orr-Mellon thesis which introduced the notion of uncertainty into the well-known comparative static analysis of bank credit expansion. The paper "The Impact of Monetary Stringency on Business Investment" utilizes the unique potential provided by the OBE-SEC surveys of the capital outlays of non-farm business to develop quantitative estimates of the reductions in both plant and equipment and inventory investment which resulted from the unusually severe credit stringency in 1966. An attempt is made to distinguish the direct effects, operating through the high cost of funds from accelerator or expectational effects, operating through reductions in actual or expected sales attributed to the impact of credit conditions on the firm's customers.

This article presents abstracts of articles about money, credit and banking. The abstract of the article "Intermediaries in a Macroeconomic Model," by A. Benavie presents a qualitative analysis, which is made of the impact of intermediary behavior on the strength of monetary controls. The familiar static Keynesian model with rigid wages and prices is expanded to include currency, commercial bank time deposits and non-bank intermediary claims. The abstract of another article "A Model of the Term Structure of Interest Rates," by G.O. Bierwag and M.A. Grove discusses the term structure of interest rates as explained by the traditional expectations hypothesis, which is built on the assumptions of identical single-valued expectations among investors and perfect substitutability among securities. The assumption of identical single-valued expectations implies that all investors are "plungers" in which case it is difficult to see how a structure of interest rates could be determined. Market equilibrium is not grafted upon the analysis by assumption but derived from the interaction of investors seeking to maximize utility. In this more general model, investors may diversify their portfolios.

The section presents abstracts of studies on credit, banking, monetary policy and consumer finance. Consumer Credit: Some Long Term Economic Aspects by C.-J. Bouvenc discusses an alternative-method of analysing the long-term effects of consumer credit, starting with an assumption of changing technology and concentrating on the firm's production and marketing techniques. A main interest is to study the relationship between new goods and consumer credit. The starting point is shifted to essentially the producer side, though the consumer side is taken into account. The paper The Demand for Money by Households, Money Substitutes and Monetary Policy by M.J. Hamburger investigates the effects of several variables on the household demand for money. The paper by R.E. Krainer attempts to tackle the interest rate investment relationship by regressing various measures of security issuances for plant and equipment expenditures against a set of independent variables, one of which is a measure of the cost of capital. The paper by D. Laidler seeks to provide systematic evidence on the role of the rate of interest in a demand for money function constrained by permanent income. When time deposits are included in the definition of money the rate of interest is an important variable and a short rate provides the better results.

This section presents abstracts of research and articles on economics, published in the December 1966 issue of the Journal of Economic Abstracts. In the paper A Restatement of the Quantity Theory of Money, author M. F. C. Allais proposes a formulation to give a operational content to the quantity theory of money, by showing that the velocity of circulation of money at any given moment can be very closely described by a functional of all the earlier values of total outlay, invariant over time and between different countries. The article The Demand for Money: A Cross-Section Study of British Business Firms by L. De Alessi aims to report additional evidence concerning the predictive content of the wealth adjustment model and the effect of alternative definitions of money on the observed wealth elasticity of the money demand function. Meanwhile, the paper The Term Structure of Interest Rates, and Recent British Experience by D. Fisher takes a second look at the empirical position of the Expectations Hypothesis for Great Britain. Authors S. M. Goldfield and E. J. Kane develop a formal model of bank behavior to explain decisions by member-banks to borrow from the U.S. Federal Reserve in the paper The Determinants of Member-Bank Borrowing: An Econometric Study.

The article presents the abstracts of several papers on economics published in the July 1965 issue of the "Southern Economic Journal." The first paper of the journal is "Cost-Benefit Analysis in Education," by Jack Wiseman. It opines that the analytical and practical potential of the benefit-cost approach to education as an economic activity is accepted, but the conceptual and practical difficulties remaining to be solved are such that there is room for a diversity of approaches. The second paper of the journal is "Institutional Elements in the Financing of Education," by W. Craig Stubblebine. Using a simple analytical model, it is shown in the second paper that not one of the financial institutions compared could insure a higher level of support than the others, at least not in a static world of fully informed decision-makers. The third paper of the journal "Human Inequalities and Southern Underdevelopment," by Mary Jean Bowman, uses education, income and occupational distributions and their interrelationships to delineate regional socio-economic structures as of 1960, to trace changes in the Southern position over the past two decades, and to specify the extent of interregional convergence.

Presents information related to several articles on economics. Issues related to the economics of public debt; Size of firm, market structure, and innovation; Impact of devaluation and the redistributive effect; Role of compensating balance requirements in the market for bank loans.

This article presents reports and documents on money and banking. Andrew MacFarland Davis has added a supplement to the origin of the national banking system. The proceedings of the international conference on bills of exchange, held at the Hague, Netherlands during June 28 to July 15, 1910, have been published as a government document. This includes the report of the American delegate, Charles A. Conant, a summary of the discussions at the several sessions and the papers submitted by the several delegations, several of which deal with the history of the law of exchange. In I 909 Massachusetts passed an act authorizing the establishment of credit unions, the first law enacted in the United States for this purpose. In order to encourage the formation of such associations the Bank Commissioner has issued a pamphlet Credit Unions in which there is a brief statement of the history and principles of foreign credit associations. Other recent publications of the National Monetary Commission are "The Bank of issue in Italy," by Tito Canovai, general secretary of the Bank of Italy, with an article by Professor Ferraris and Banking in Russia, Austro-Hungary, the Netherlands and Japan.

The article presents information on various books on economics. Some of these books include "Interest Rates and Stock Speculation: A Study of the Influence of the Money Market on the Stock Market," by R.N. Owens and C.O. Hardy, "Bank Secondary Reserve and Investment Policies," by P.M. Atkins, "The Leading New York Banks: A Seventeen Year Comparison," "La concentration bancaire: un aspect de la rationalisation," by R. Giraud, "The Economics of Money, Credit and Banking," by F.C. James, "The Business Man and His Bank," by W.H. Kniffen and "Fractional Money: A History of the Small Coins and Fractional Paper Currency of the United States," by N. Caothers.

This article presents a report of the representative on the Board of Directors of the U.S. National Bureau of Economic Research. The National Bureau published two books and three occasional papers in 1949. Four reports were in press at the end of the year. The total of studies nearly completed or well under way of which publication is contemplated within two or three years is thirty-two. These are divided among fields such as business cycles, Income and flow of money, Employment and productivity, Labor and wages, Urban real estate finance, Agricultural finance, Corporate finance and Public finance. Researcher Milton Friedman began his investigation of the cyclical behavior of the money supply and suggested changes in American banking since the Civil War. Rutledge Vining is preparing a report on regional variations in business conditions in the United States. Lawrence Klein is making a study of the factors that account for differences in investment by different railroads, with a view to utilizing this information in an econometric model directed towards variations in investment over time.

The article focuses on documents and reports on money and banking in the U.S. The National Monetary Commission has added to its list of reports German Bank Inquiry, Stenographic Reports, Volume II. The National Citizens' League, organized for the promotion of a sound banking system, with headquarters at Chicago, Illinois, has published several pamphlets, copies of which may be had upon application. The legalization of time bills of exchange is advocated in order to create a liquid market. Among the pamphlets distributed is Banking Reform and the National Reserve Association by J. Laurence Laughlin and Recent Addresses, by President Taft. In the Proceedings of the Seventeenth Annual Convention of the Wisconsin Bankers' Association held July 12 to 13, 1911, may be found a paper on currency reform by George M. Reynolds. In the Fifty-fourth Annual Report of the Bank Commissioner of Maine, 1910, attention is called to the net increase of savings deposits in national banks. The average rate of interest paid by savings banks was 3.81 percent in 1910 as against 3.90 percent in 1909.