War borrowing

Bibliographic data

Monograph

Identifikator:: 101124439X

URN:: urn:nbn:de:zbw-retromon-21219

Document type:: Monograph

Author:: Hollander, Jacob H. http://d-nb.info/gnd/136924867

Title:: War borrowing

Place of publication:: New York

Publisher:: The Macmillan Company

Year of publication:: 1919

Scope:: 1 Online-Ressource (215 Seiten)

Digitisation:: 2018

Collection:: Economics Books

Usage license:: Get license information via the feedback formular.

Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: The price level

Collection:: Economics Books

THE PRICE LEVEL 179 serve Banks as fiscal agents. But the essence of the operation will be the creation of additional credit by the subscribing bank. The subscribing ability of a bank will be limited — in the absence of reserve re quirements against such government deposits — only by the extent that it must be in a position to meet withdrawals. If the bank is able by rediscounting to supply a credit balance at the Federal Reserve Bank or to secure Federal Reserve notes to meet currency withdrawals, there is not even this re straint. The first step of the borrowing process — in so far as the banks make payment for certificates by credit — is the creation of an additional volume of credit in the form of government deposits. The course of such newly created credits, when liberated in process of government expenditure, pre sents the same variety of possibilities heretofore noted. Paid over to the public creditors (munition makers, ship-builders, etc.) in the form of the Treasury’s drafts upon its balances, they may be used by the recipients to discharge maturing loans, to swell deposit accounts or to obtain additional circu lating medium. In the first event the inflation effected will be limited to the period within which the government deposits were dispersed; in the other cases there will be a continuing effect. The final stage in the operation will be the tender of some part of the certificates in settlement of bond subscriptions, and the liquidation of the remaining part at maturity (unless called for prior redemp tion) from out the proceeds of taxes, Liberty Loans or refunding certificates. If these new proceeds are obtained from savings the result will be (a) de

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