The Mystery of Banking

See
banking
free banking.
See
banking
free price system, role in clearing markets,
20, 21
frequency of payment, element of demand
for money, 60–63
Fullarton, John, 289
Gage, Lyman J., 233
Germany, hyperinflation (1923), 68, 72,
73
Gilbart, James William, 286–88
Girard, Stephen, 201
gold
demand for, effect on money supply,
148–49
denationalized, 262–63 
inflows of, 249 
market, 251
supply of 
counterfeiting and, 47–51 
on the free market, 47–48
gold and silver, dominant as moneys, 8
gold certificates, 86, 238
gold exchange standard, 244, 249–50
of Great Britain, 244–45
gold standard
America taken off the, 248 
central banking and, 126, 132 
classical, 122 
inflationary check, 54 
plans, 267 
return to, 261–66
goldsmiths, safekeeping of gold, 88n, 90
Gouge, William M., 187, 204
government 
debt, 172–76, 212, 220–23, 225
deficits
central banking and, 170–76 
crowding out effect of, 171
paper money
gold circulating alongside, 55–56 
origins of, 51–55, 55–58 
Treasury cash, 171
securities, object of open market oper-
ations, 157
Index
295
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Great Britain
gold exchange standard of, 244–45
See also 
England; Scotland
Great Depression, xx, 248
greenbacks, 55, 219
Greenspan, Alan, xv
Hamilton, Alexander, 193
Hammond, Bray, 216
Harley, Robert, 181
Harrison, George L., 241
Havenstein, Rudolf, 72–73
Hayek, F.A., 267
Hilton, Boyd, 288n
Holdsworth, John Thom, 196n
Hoover, Herbert, 248
Hübner, Otto, 279
Hull, Cordell, 249, 250
hyperinflation, 68, 72
Independent Treasury System, 214
indirect exchange, money as instrument
of, 5
indivisibilities
money as solution to, 5 
problem under barter, 4
inflation
counterfeiting as, 49 
exporting, 250
See also
price inflation
inflationary and deflationary expectations,
element of demand for money, 66–74
international trade
check on credit expansion, 120–22 
disrupted, 249
interventionism, dynamics of, 222
investment banking.
See
banking
investment, safekeeping vs., 93
Jackson, Andrew, 208
Jevons, William Stanley, 94
Kirkland, Edward, 221
Klein, Benjamin, 185n
Klein, John, 229
Knox, John Jay, 218n
Laffer, Arthur, 267
legal tender laws, 53, 179, 183, 194, 26
Lehrman, Lewis, 267
liabilities, 77
life insurance cash surrender values, 257
loan banking. 
See
banking
loans
advance, 149–53 
by central bank, 149–53 
short term, 151
Manchester School, 281–82
maravedi, debasement of, 12
Massachusetts, government paper money
in, 56–57
mercantilism, 191, 193
Mexico, 210
microeconomics, price theory and, 15
minting, competitive, 264
Mises, Ludwig von
on credit and claim transactions, 99n 
on credit expansion, xvii 
on the definition of gold, 262 
on free banking, 124, 278, 279n 
on the inflationary process, 68, 281n 
on the optimal money supply, 45 
regression theorem of, 3 
on the specie flow price mechanism,
122
Theory of Money and Credit
, xviii
value and price theory, xviii
Modeste, Victor, 280
monetarists, 252, 258
monetary base, 258
Monetary Control Act (1980), 157
monetizing the debt, 172–75, 216 
directly from the Federal Reserve,
174–76
money
certification of, 10 
circulation of foreign, 10n 
commodities used as, 6 
commodity, xix
debasement of, 11–13 
demand curve for, 32 
demand for 
changes in, 39–40 
elements of, 59–74
fiat, xix
as final payment, 64, 256 
importance of, 1–2 
medium of exchange, 5 
origin of, 3–6 
price level and, 29–41 
purchasing power of money (PPM),
30–35 
changes in, 35–41 
effect of frequency of payments
on, 62 
equilibrium, 31–35