Banking standards under the federal reserve system

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Monograph

Identifikator:: 1762969653

URN:: urn:nbn:de:zbw-retromon-142432

Document type:: Monograph

Title:: Banking standards under the federal reserve system

Place of publication:: Chicago

Publisher:: A. W. Shaw Company

Year of publication:: 1928

Scope:: xxxviii, 420 Seiten

Digitisation:: 2021

Collection:: Economics Books

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Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Part V. General summary and interpretation

Collection:: Economics Books

351 supply the funds necessary for the conduct of business and indus- try. Closely linked as they are with the fortunes of business, it may be assumed in general that whatever fluctuations occur in business as a whole will tend to be reflected in banking resources. If this is true, then, provided general business is substantially the same district by district during the years 1919 to 1925, the first link in the chain of phenomena which accounts for the similarity of behavior of banking series in the several districts is secured. “Bank debits . . . . constitute an extremely representative measure of the complex of activities included under the term general business. Production of consumption goods, wholesale and retail trade, construction of buildings and engineering projects, and agriculture—these and all other forms of economic activity have a share in making up the total of check transactions.”? If this is true, and if the general trend and year-to-year fluctuations of bank debits by districts closely agree with each other and with those for all districts combined, then the conclusion follows that business conditions tend to be the same and to change together in the various parts of the country, as indicated by the geo- graphical limits of the districts themselves. This chain of reason- ing may be set out as follows: Total bank debits tend to fluctuate with general business conditions; Bank debits by districts tend to fluctuate with total bank debits; District bank debits tend to fluctuate with district business condi- Hons. INTERPRETATION This set of relations is illustrated in Chart 51, on which are plotted, to a ratio scale, for each district, the debits for the cities located therein and also the total debits for all of the 141 cities combined. But from the above reasoning and from the graphic illustration in Chart 51, the conclusion follows that district business con- ditions tend to fluctuate together. This comes about because District bank debits tend to fluctuate with district business condi- tions; District bank debits tend to fluctuate together; District business conditions tend to fluctuate together. 2 Weekly Letter No. 2, Vol. VII, January 14, 1928, page 11, Harvard Economic Society, Cambridge, Massachusetts. 3 This condition follows by analogy only.

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