High Prices and Deflation

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Princeton University Press, 1920 - Cost and standard of living - 86 pages
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Page 20 - Provided, however, That if located in the outlying districts of a reserve city or in territory added to such a city by the extension of its corporate charter, it may, upon the affirmative vote of five members of the Federal Reserve Board, . hold and maintain the reserve balances specified in paragraph (a) hereof.
Page 14 - The effect of this large-scale purchase by the government, often in the early stages of production, and its method of dispensing them without the further use of money, by decreasing the rapidity of circulation of great quantities of goods, must have affected the price level in the same way as would a reduction in the amount of goods, or a sudden resort to barter on a large scale, or to a more direct move of marketing.
Page 7 - Will the price level decline in the near future, and if so what forces will work to bring about the decline? The subjects suggested by these three questions may be briefly designated by the terms Inflation, High Prices, and Deflation — the subjects of the three chapters of this book. Although the term inflation in current discussions is used in a variety of meanings, there is one idea common to most uses of the word, namely, the idea of a supply of circulating media in excess of trade needs. In...
Page 19 - ... deposit with a national bank in a reserve city or a central reserve city. For all banks the 5 per cent cash redemption fund held at Washington against outstanding bank notes was counted as part of the legal reserves against deposits. At the present time all legal reserves of national banks consist of deposits with federal reserve banks against which deposits the federal reserve banks are required to maintain only a 35 per cent lawful money reserve. Time deposits, namely deposits payable after...
Page 20 - ... have also been made since 1913, as for example those relating to "the float" and to reserves against United States Government deposits, but the changes above mentioned are the principal ones. An idea of the extent of the reductions in legal reserves of national banks since 1913 can be obtained by assuming three national banks, each having $1,200,000 demand deposits, $300,000 of time deposits, and $100,000 of national bank notes outstanding, one bank being in a central reserve city, one in a reserve...
Page xiv - EW High prices and deflation: An explanation of inflation and the rise in the cost of living since 1913; why prices must ultimately come down and the policy to be pursued in order to bring about deflation. (Princeton, NJ: Princeton Univ. Press. 1920. Pp. 86. $1.25.) A revision and reprint of three articles recently published by the Bankers' Statistics Corporation of New York City.
Page 17 - ... circulation figures for the four quarterly dates, beginning with that of March 31. The circulation includes all kinds of money in the country, except that held in the federal treasury as assets of the government, and except that part of the cash held by the twelve federal reserve banks and the twelve federal reserve agents, that would represent the same percentage of cash reserve against outstanding federal reserve notes as the percentage held against deposits and notes combined. Only net circulation...
Page 67 - The safety and security of our economic organization demand that there be a reasonable relationship between the size of the metallic base and the size of the superstructure of circulating media it supports.
Page 85 - The principal conclusions of this chapter may be summarized as follows : Deflation is a painful economic process. By raising the value of the monetary unit in which debts are expressed it places unjust burdens upon many debtors to the advantage of creditors. It depresses business, and tends to reduce the demand for labor thereby increasing unemployment, forcing down wages, and causing labor troubles. Despite these evils, world deflation is absolutely necessary, although less deflation is needed in...
Page 22 - ... result of belligerent Europe's heavy demands upon us. for war supplies during the period before our entering the war, accompanied by a heavy decline in her merchandise exports to the United States, the first three years of the war witnessed a huge net importation of gold into the United States. From August 1, 1914, to April 1, 1917 (practically the period of the war prior to our entrance as a belligerent) our net importations of gold amounted to $1,109,000,000 and our stock of monetary gold increased...

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