The Emergence Of A National Economy The National Bank Money Credit And Debt 1776 1820 Pt 2

Reprint of the original, first published in 1881.

At the height of the Great Depression a number of leading U.S. economists advanced a proposal for monetary reform that became known as the Chicago Plan. It envisaged the separation of the monetary and credit functions of the banking system, by requiring 100% reserve backing for deposits. Irving Fisher (1936) claimed the following advantages for this plan: (1) Much better control of a major source of business cycle fluctuations, sudden increases and contractions of bank credit and of the supply of bank-created money. (2) Complete elimination of bank runs. (3) Dramatic reduction of the (net) public debt. (4) Dramatic reduction of private debt, as money creation no longer requires simultaneous debt creation. We study these claims by embedding a comprehensive and carefully calibrated model of the banking system in a DSGE model of the U.S. economy. We find support for all four of Fisher's claims. Furthermore, output gains approach 10 percent, and steady state inflation can drop to zero without posing problems for the conduct of monetary policy.

Excerpt from The National Loans of the United States, From July 4, 1776 to June 30, 1880 The opening of the Revolutionary War excited deep interest in Europe, and especially in France, which power, once the possessor of two-thirds of North America, had been humbled by the seven years' warfare that closed with the treaty of Fontainebleau, under which France had been forced to surrender to Great Britain all her American possessions except a few unimportant islands. The French watched with interest the course of events that threatened in turn to strip their hereditary enemy of both her old and new possessions in America, and to build up on this side of the Atlantic a new power. The contest claimed the particular attention of the Comte de Vergennes, the French minister of exterior relations, who, though unwilling at first to conclude an armed alliance with the colonies, determined to assist them with money and munitions of war. The treaty followed, but the military supplies and money furnished early in the contest-were of the utmost importance. These supplies were not furnished openly, because France was not in a position to commence war with Great Britain. Accordingly the celebrated Caron de Beaumarchais was employed as a secret agent. He was a brilliant French writer and courtier, a man of great vivacity and energy, but apparently with limited knowledge of mercantile afi'airs. As much sympathy has been expended on the memory of Beaumarchais, and his fate has been referred to as an illustration of the ingratitude of republics, an attempt will be made to bring to light, from the documents on record and from the works of his biographer and contemporary authorities, the facts in the case, with a view of showing the justice or injustice of the settlements between Beaumarchais and the United States. This question once divided Congress, and was the cause of much bitter feeling. It can now, however, be discussed, by the aid of documents then inaccessible, without prejudice. The charge made against the United States was a serious one, and involved the receiving of millions of dollars worth of supplies under a regular contract during the darkest hours of the Revolution, and then allowing the person furnishing these supplies to pass his last days in prison for the non-payment of the debt thus incurred. About the Publisher Forgotten Books publishes hundreds of thousands of rare and classic books. Find more at www.forgottenbooks.com This book is a reproduction of an important historical work. Forgotten Books uses state-of-the-art technology to digitally reconstruct the work, preserving the original format whilst repairing imperfections present in the aged copy. In rare cases, an imperfection in the original, such as a blemish or missing page, may be replicated in our edition. We do, however, repair the vast majority of imperfections successfully; any imperfections that remain are intentionally left to preserve the state of such historical works.

This work has been selected by scholars as being culturally important, and is part of the knowledge base of civilization as we know it. This work was reproduced from the original artifact, and remains as true to the original work as possible. Therefore, you will see the original copyright references, library stamps (as most of these works have been housed in our most important libraries around the world), and other notations in the work. This work is in the public domain in the United States of America, and possibly other nations. Within the United States, you may freely copy and distribute this work, as no entity (individual or corporate) has a copyright on the body of the work.As a reproduction of a historical artifact, this work may contain missing or blurred pages, poor pictures, errant marks, etc. Scholars believe, and we concur, that this work is important enough to be preserved, reproduced, and made generally available to the public. We appreciate your support of the preservation process, and thank you for being an important part of keeping this knowledge alive and relevant.