The stock market crash - and after

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Monograph

Identifikator:: 1815583320

URN:: urn:nbn:de:zbw-retromon-204544

Document type:: Monograph

Author:: Fisher, Irving http://d-nb.info/gnd/118533541

Title:: The stock market crash - and after

Place of publication:: New York

Publisher:: Macmillan

Year of publication:: 1930

Scope:: XXVI, 286 S.; graph. Darst

Digitisation:: 2022

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: Chapter XII. Relief in Seven Years of Stable Money

Collection:: Economics Books

188 The Stock Market Crash—And After profit, due to a sort of bogus accounting in terms of a varying dollar. For when this depositor came to spend his $300 in 1920, he found prices nearly four times as high as they had been in 1896. Hence, his entire accu- mulation of $300 would buy only about three-quar- ters as much as his original $100 would buy in 1896. Federal Reserve Control of Price Level It was doubtless partly to avoid these upward and downward fluctuations in the value of the purchasing power of the dollar that the Federal Reserve Board has tried to influence the expansion and contraction of the currency on behalf of the nation’s business. Thus in 1922, when the war and efforts at recon- struction had occasioned the flow to America of huge gold reserves that threatened inflation, officials of the Federal Reserve Board realized that all possible steps should be taken to prevent it. Had they not taken such action, but encouraged the banks to con- tinue to follow blindly the profit motive, they would have loaned and reloaned their gold reserves until the credit structure had been doubled. Then the reserve ratio, instead of being, as it was in the fall of 1929, about 70 per cent, would, under the profit motive, have sunk more nearly to the legal ratios— 35 per cent for deposit liabilities and 40 per cent for Federal Reserve notes. This doubled credit structure would probably have led to a doubled price level. There would have been consequent inflation quite comparable to the inflation

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