THE MONETARY AND BANKING SYSTEM

by Prof. George Walter WoocLworth.McGraw-Hill Book Company, 1950; $5.00.

Writers of textbooks on money and banking have always been plagued with the problem that the subject of money can't be carried very far unless the reader knows the rudiments of banking. Similarly, the subject of banking can't be developed as it should be unless the reader understands the basic principles of money. Resolution of that dilemma has not been easy. More recently other problems of structure and content have appeared. Factual details and historical materials relating to money and banking laws have been fast accumulating and in dealing with these details both writer and reader often have lost sight of the fact that, after all, money and banking is a vital and integral part of a modern economic system. Professor George Walter Woodworth has been fully aware of these problems and has striven hard to overcome them in his book "The Monetary and Banking System".

The first five chapters of the text are used to develop in the following order, financial functions, elements of the monetary system, the value of money and the price system, effects of price level changes, and monetary standards. With this background, commercial and central banking are described and two historical chapters of monetary history are developed. The author then deals with the functions of banks—deposits, clearings and collections, loans and investments. Careful attention is given to the importance of multiple expansion and contraction of bank credit. Forces governing the price level, the stock of money, the velocity and circulation of money and the physical volume of trade are then ana: lyzecl. This material leads logically into interpretation of changes in price and in production and price changes under cyclical conditions. A chapter is then devoted to modern theories of prices and . production where attention is given to the Keynesian analysis and to the Swedish economists, Lindahl, Lundberg, Myrdal and Ohlin.

International finance is compressed into two chapters. Here the usual fundamentals of international trade and finance are described and explained briefly and the recent developments in international finance are sketchedexchange controls, stabilization funds, exchange depreciation, exchange rationing, Import-Export bank, the International Bank, the International Monetary Fund, and other complexities of modern finance in a disjointed world.

After this excursion into international finance, the author moves into the money market via a discussion of the rate of interest. Several chapters are devoted to different phases of the money market, which the author feels must be understood by financial executives who have to pass judgment on policies concerning such things as loans, investments, solvency and liquidity. Money and debt management, whether by private financiers or by government officials, can be done more wisely if the relations and complexities of the various phases of the money market are understood.

Professor Wood worth writes simply and clearly. He has supplied statistical material where it seems desirable but he does not burden the reader with an excess amount.

Moreover, at the end of each chapter, he has provided his readers with a series of useful questions, problems, and references. At the end of his book there is a serviceable index.

In slightly less than six hundred pages of text. Professor Woodworth offers an excellent basic education in money and banking. He is to be commended for his efforts and congratulated on his results.