The Mystery of Banking

Edinburgh Magazine
, 283n
bookkeeping, double-entry, 76
Bosanquet, J.W., 288
Bretton Woods system, 250–51
business calculation
money as solution to, 5–6 
problem under barter, 4
business cycle, fractional reserve banking
behind, 103, 114, 120–22, 203, 209
Cantillon effect, xvii, 49–51
cash 
balances, average, 60–63 
demand for, 32–35
as contractionary pressure on
banking system, 141–48
determinants of, 147
central banking. 
See
banking
Cernuschi, Henri, 124, 279n, 280
certificates of deposit (CDs), 255
Chase, Salmon P., 220, 222–23
checking deposits. 
See
demand deposits
Checkland, Sydney, 271, 273, 274, 275
China
deposit banking in, 91 
government paper money in, 56
cigarettes, as money, 7
Civil War, American, 219–20
claim transaction, deposit as, 87
Clapham, John, 180–81
clearing systems
element of demand for money, 63–65 
in the United States, 216–18
Cobbett, William, 284n
Cobden, Richard, 281–83
coincidence of wants
money as solution to, 5 
problem under barter, 4 
See also 
fractional reserve banking
confidence
element of demand for money, xvii,
65–66 
fractional reserve banking and, 103 
free banking and, 112–14
Constitution of the United States, 193
Continentals, depreciation of, 55
Cooke, Henry, 223–24
Cooke, Jay, 220–21, 223, 228–30
counterfeiting
fractional reserve banking as, 98–101 
free banking and, 185n 
gold standard and 48–51 
government involvement in, 51–55 
warehouse receipts, 89
“crack–up boom,” 72
credit cards, effect on demand for money,
64
credit expansion
checks on, 111–24 
end result of, xvii 
international limits on, 120 
needs of trade doctrine of, 287, 288
credit transaction, loan as, 87
currency blocs, 249, 250
Currency School, 186–88, 277–83
Dallas, Alexander J., 201
debasement, of money, 11–13, 43
deflation. 
See
money supply, contraction of
deflationary expectations. 
See
inflationary
and deflationary expectations
demand and supply. 
See
supply and
demand
demand curves
downward sloping, 16–18, 19 
for money, 32 shape of, 17n
demand deposits. 
See
deposits
demand
changes in, 24–26 
law of, 16–18 
criteria for money commodity, 6 
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money supply’s effect on, 27–28
schedule, 16
Democratic Party, 207, 214
Democratic-Republicans, factions within,
194–95
deposits
bailments and, 87 
demand, 2 
bank notes vs., 106 
British Currency School on, 188,
280 
fractional reserve banking and,
104–10
fungibility of, 89 
general vs. special, 93–94
dinar, debasement of, 12
discount loans (rediscounts), 149–53 
penalty levels, 153
window, 151–53
divisibility, criteria for money commodity,
6–7
dollars
definition of, 10, 262 
history of term, 9, 9n
durability, criteria for money commodity, 7
Economics textbook, xvii, xix
economists, intellectual shift of, 232
Ellis, Richard E., 195n
embezzlement, 88–89 
deposit banking and, 90–94
England
banking system compared with that of
Scotland, 184–86, 269–70 
central banking in, 177–83, 186–90 
deposit banking in, 88
equity capital, 77
exchange rates, gold standard and, 9, 10
Federal Deposit Insurance Corporation
(FDIC), 147, 248, 264
federal funds market, 151–52
Federal Reserve Credit, 259–60
Federal Reserve System, xv, xix, 235–46 
forecasting its actions, 1 
image of, xv–xvi, xx, xxi
liquidation of, 263 
Notes of, 238 
origins, xx
reserves determined by, 141–60
Federalists, 193
Fetter, Frank W., 275, 282, 285
fiat money standard
Bank of England and, 182, 288 
origin of, 54 
post-Civil War, 219
First Bank of the United States, 193–95
Fourth National Bank of New York, 228
fractional reserve banking.