1. How money and credit are related to prices. The meaning of “prices”. The quantity theory of money. Relation of money to credit. Reserves for paper money. Bank reserves. Discounting and rediscounting. How inflation of money and credit affects prices. Index numbers. American experience during the years 1914-1921. References: F. W. Taussig, Principles of Economics, Vol. I, pp. 427-445; C. J. Bullock, Introduction to the Study of Economics, pp. 242-278; Irving Fisher, The Purchasing Power of Money, pp. 8-32; Ibid., Stabilizing the Dollar, pp. 1-12; J. A. Hobson, Gold, Prices, and Wages, passim; David Kinley, Money, pp. 199-223.

2. The American banking system: how it is organized and how it functions. D. R. Dewey, Financial History of the United States, pp. 320-328; 383-390; F. W. Taussig, Principles of Economics, Vol. I, pp. 375-399; C. F. Dunbar, Theory and History of Banking, pp. 132-153; C. A. Conant, A History of Modern Banks of Issue, pp. 396-447; E. W. Kemmerer, The A, B, C of the Federal Reserve System, pp. 28-65; H. P. Willis, The Federal Reserve System, passim; A. B. Hepburn, History of the Currency and Coinage of the United States, pp. 411-418; 511-544.

3. The controversy over free silver and its lessons for the future. D. R. Dewey, Financial History of the United States, pp. 101-104; 210-212; 403-413; 436-437; 468; F. W. Taussig, Principles of Economics, Vol. I, pp. 265-273; J. L. Laughlin, History of Bimetallism in the United States, especially pp. 266-280.

1. The early history of money. W. S. Jevons, Money and the Mechanism of Exchange, pp. 19-30; David Kinley, Money, pp. 14-26.

2. The quantity theory of money. F. W. Taussig, Principles of Economics, Vol. I, pp. 236-251.

3. American and foreign banking systems compared. E. R. A. Seligman, Principles of Economics, pp. 524-550; or F. W. Taussig, Principles of Economics, Vol. I, pp. 360-385.

4. Can the dollar be stabilized? Marshall, Wright, and Field, Materials for the Study of Elementary Economics, pp. 474-483; Irving Fisher, Stabilizing the Dollar, especially pp. 12-30.

5. The free-silver campaign of 1896. C. A. Beard, Contemporary American History, pp. 164-198; D. R. Dewey, National Problems, pp. 220-237; 314-328.

6. Banking operations and accounts. C. F. Dunbar, History and Theory of Banking, pp. 20-38.

7. American institutions for saving and investment. F. A. Fetter, Modern Economic Problems, pp. 146-166.

8. Financial panics. F. W. Taussig, Principles of Economics, Vol. I, pp. 400-426.

9. The high cost of living. J. H. Hammond and J. W. Jenks, Great American Issues, pp. 143-159.

10. Economic crises. T. N. Carver, Principles of National Economy, pp. 427-442.

1. Are the qualities of money given in this book in the order of their importance? If not, rearrange them so. Can you think of any other essential qualities? What objections would there be to the use of platinum as money? Pearls? Porcelain?

2. Gold dollars are not coined in the United States at all. How is it, then, that the gold dollar can be the legal standard of value?

3. Name all the different kinds of money that are circulated in the United States (including paper money) and tell when the issue of each kind was first authorized. Examine the money you have with you. Tell where each coin was minted. In the case of bills what is the security behind each? Can you detect counterfeit bills? How?

4. Why was the action of Congress in demonetizing silver called “the crime of 1873”?

5. At the Democratic National Convention of 1890 Mr. Bryan said: “You shall not crucify mankind upon a cross of gold.” Explain in full what he meant. Was there any good reason for believing that the free coinage of silver at a ratio of sixteen to one would (a) increase prices; (b) give relief to the debtor class; (c) benefit the wage earner?

6. Explain the process by which, under a dual system of coinage, the metal which is over-valued at the mint will drive the other out of circulation. Is it correct to say that “cheap money drives out dear money”?

7. If you were engaged in business as a manufacturer, name all the different dealings that you might have with a bank.

8. Explain what is meant by each of the following terms: demand note; endorser; trustee; commercial paper; rate of discount; rediscounting; collateral; deflation; coupon bond; preferred stock; broker; buying stock on margin.

9. Show how the volume of credit helps to determine prices and how the volume of credit is related to the amount of gold coin in hand. Why does the quantity theory of money not work out with mathematical accuracy in practice?

10. Does the argument in McCulloch vs. Maryland impress you as logical? Does the decision mean that officials of national banks and of federal reserve banks are exempt from state taxes? Does it mean that when a national bank occupies a leased building the landlord pays no taxes to the city?

1. All banking institutions should be brought under the supervision of the federal government.

2. A “compensated” dollar (adjusted to the general level of prices) should be established as a measure of deferred payments.

3. The national and state governments should guarantee depositors against loss in all banks chartered by the nation and the states, respectively.