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THE A B C OF THE FEDERAL
RESERVE SYSTEM
BY
EDWIN WALTER KEMMERER, PH.D.
PROFESSOR OF ECONOMICS AND FINANCE
IN PRINCETON UNIVERSITY
With a Preface by
BENJAMIN STRONG, LL.D.
GOVERNOR OF THE FEDERAL RESERVE BANK OF NEW YORK
FOURTH EDITION
PRINCETON UNIVERSITY PRESS PRINCETON, N. J.
LONDON: HUMPHREY MILFORD
OXFORD UNIVERSITY PRESS
HARVARD COLLEAR
LIBRARY
COPYRIGHT, 1920.
PRINCETON UNIVERSITY PRESS
Princeton, N. J.
Published September, 1918 Revised December, 1918
Revised March, 1919 Second printing April, 1919 Third edition, November, 1919
Fourth Edition, April, 1920
Printed in the United States of America
Lack of familiarity with federal reserve system on part
of public, and its dangers, 1.-Purpose of book, 2.-
Plan of book, 2.
CHAPTER II
DECENTRALIZATION OF AMERICAN BANKING PRIOR TO FEDERAL
...
Banks lacked organization and effective leadership in
time of crisis, 3-4.-Reserves widely scattered, 4-6.-Re-
serves immobile, 7.
CHAPTER III
.......
INELASTICITY OF AMERICAN BANK CREDIT PRIOR TO FEDERAL
Extent to which bank credit is used as a medium of
exchange, 8-10.-Why circulating bank credit should be
elastic, 10-11.-Bank-note inelasticity over long periods
under old banking system, 11-13.-Seasonal inelasticity
of bank notes, 13-15.-Bank-note inelasticity in times of
crisis, 15-17.-Inelasticity of deposit credit, 17.-Evil re-
sults of credit inelasticity, 18.
CHAPTER IV
DEFECTIVE EXCHANGE AND TRANSFER SYSTEM
The "float" and the practice of routing checks, 19-21.-
Checks in transit commonly counted as legal reserve
money, 21-22.-Large domestic shipments of currency re-
quired under old banking régime, 22-23.-Foreign exchange
difficulties, 23-24.
CHAPTER V
PAGES
.ix-xiii
1-2
3-7
8-18
19-24
DEFECTIVE BANKING MACHINERY FOR FEDERAL GOVERNMENT. 25-27
Difficulty of apportioning government funds among nine
sub-treasuries and over fifteeen hundred depositary banks,
25-26.-Four evil results of practice, 26-27.-Summary of
defects of old banking system, 27.
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