Abstract

The Week

The article focuses on the political and economic conditions of the United States. The proposed amendments to the law, submitted by the U.S. Federal Reserve Board to Congress last Saturday, have to do primarily with control of the country's gold. The Board's opinion is that, in so far as gold is held in reserves of individual banks, the chance for undue inflation of credit is increased. It also believes that such holding of gold would in the future render a gold export movement difficult to control. At present, a member bank must keep in its own vaults one-third of the cash reserve required against deposits, and a slightly larger proportion in the Federal Reserve Bank. The Board recommends that all the cash reserve of a member bank except 5 per cent of its deposits be lodged with the Reserve Bank; which, it estimates, would mean a transfer of $250,000,000.