Referendum on the report of the Special Federal Reserve Committee

Bibliographic data

Monograph

Identifikator:: 1827879114

URN:: urn:nbn:de:zbw-retromon-221388

Document type:: Monograph

Title:: Referendum on the report of the Special Federal Reserve Committee

Place of publication:: [Erscheinungsort nicht ermittelbar]

Publisher:: [Verlag nicht ermittelbar]

Year of publication:: 1930

Scope:: 53 S.; graph. Darst.

Digitisation:: 2022

Collection:: Economics Books

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ARGUMENTS IN THE NEGATIVE ward over such periods that true trends are discernible so far as the general level is in- Auenced by the volume of credit. Studies which have been made by statisticians and economists suggest that the average growth in the physical volume of business in the United States is about 4%, and that since 1921 a tendency of bank credit to grow at a higher rate than 44% 2 year has led to conditions recognized by the federal reserve system as requiring it to apply restraints, whereas growth in bank credit at a rate less than 414% has brought about a situation in which the federal reserve system has seen reason to make credit =asier. Discussions of these studies appear in the proceedings of the American Economic Association at its meeting of 1928. Those who argue that the federal reserve system should have an express duty with respect to the general price level see in the facts cor- -esponding changes in the price level. At one of the legislative stages the bill which became the Federal Reserve Act provided that rediscount rates should be made, not only “to accommodate commerce and business,” the existing language, but also to “promote a stable price level.” As the 5ill became law, however, the latter phrase was omitted. Over a period of years bills have been introduced in Congress the effect of which would be to place in the law this smitted phrase. In 1926 and in 1928 hearings were held upon bills of this kind, in each instance ‘he bill being known by the name of its author, Congressman Strong. The principal srovision in the bill which was introduced in March. 1928, read as follows: Experience Proposals for Legislation Strong Bill “The federal reserve system shall use all the powers and authority now or here- after’ possessed by it to maintain a stable gold standard; to promote the stability of -ommerce, industry, agriculture, and employment ; and a more stable purchasing power of the dollar, so far as such purposes may be accomplished by monetary and credit solicy. Relations and transactions with foreign banks shall not be inconsistent with the purposes expressed in this amendment.” In favor of the principle of such legislation there is support of a kind which cannot be ignored. For example, the executive officer of the Stable Money Association, testifying in 1926 at elaborate hearings held by the House Committee on Banking and Currency, said: “We are hoping to see the activities of the Reserve Board in the direc ion of preventing inflation and deflation extended, refined, perfected, legalized and nade mandatory on future boards, and made to operate ministerially and not left to discretion.” Stable Money 4 ssociation This organization has a membership which includes distinguished names in bank- ‘ng, business, and economics. It does not concern itself with methods but emphasizes the ‘mportance of a stable general price level, A statement in its bulletin was: “There is probably no defect in the world’s economic organization more serious than the fact that our most common unit of value is a fixed weight of one commodity having a varying value. The resultant monetary instability brings in its train many serious economic and social results. The changing purchasing power of the dollar robs ane class of persons to the extent of billions of dollars within a few years only to give ‘Continued on page 331

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