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Bulletin HASKINS & SELLS 7 Equilibrium Creates Purchasing Power IN The Chase Economic Bulletin of June 12, 1931, Benjamin M . Anderson, Jr., the economist of the Chase National Bank of the City of New York, presents an interesting discussion on the subject of economic equilibrium versus artificial purchasing power. Dr. Anderson discredits the principle of wooing prosperity by the institution of artificial means of maintaining or increasing purchasing power by such measures as expanding bank credit, buying of bonds by commercial banks, increased lending, spending rather than saving, the Soldiers' Bonus measure, heavy borrowings by governments for the construction of public works, artificial support of markets, and artificial maintenance of prices by governmental valorization schemes. In place of these he advocates a proper balance among the various types of production, as agriculture, raw materials, manufacturing, and transportation; proper balance between the prices of goods and the costs of production, including wages, so that profits are possible; stimulating enterprise to increased activity; proper relations among the different kinds of goods; proper relations among retail prices, wholesale prices, rentals, etc.; proper balance of "exports and imports, taking into account the invisible items of the international balance sheet; proper proportion between the flow of goods and the flow of credits in international relations, and a proper balance in the money and capital markets. Dr. Anderson points out that the great depression is due to an unbalanced economic situation. Production is unbalanced; prices are unbalanced; costs have not fallen as much as prices in many lines. The international balance sheet is sadly unbalanced. The money in capital markets is in a state of unbalance, etc. As to wages, he says that wage rates cannot be held inflexible when everything else has changed, without gravely retarding the process of recovery. The equilibrium view relies upon the automatic forces of the market places to restore equilibrium when it has once been broken, instead of looking to governments and to central banks.
Object Description
Title |
Equilibrium creates purchasing power |
Author |
Anonymous |
Subject |
Depressions -- 1929 -- United States |
Citation |
Haskins & Sells Bulletin, Vol. 14, no. 03 (1931 July), p. 7 |
Date-Issued | 1931 |
Source | Originally published by: Haskins & Sells |
Type | Text |
Collection | Deloitte Digital Collection |
Digital Publisher | University of Mississippi Libraries. Accounting Collection |
Date-Digitally Created | 2009 |
Identifier | hs bulletin 14-3-p7 |