The daily worker. [volume] (Chicago, Ill.) 1924-1958, 1931-12-23
PART 2

PART 2.
The most important criterion of an initiation
airy movement is the increase in note circula-
ton. In the last few weeks, the amount of Fed
eral Reserve notes in circulation has steadily
swollen in volume. 1t has grown from $780,
$4,000 for the week ending Oct. 7th to So 49,
$4,000 for the week ending Nov IL and thence
to $2478,130000 for the week ending Dec End
Every intervening week has registered con-
tinuous gain in the amount of Federal Reserve
Notes in circulation! When comparison is made
with the circulation for the week ending Dec
3rd, 1880, of 81 45O $4,000 then the significance
of this unprecedented gain becomes clearer.
The total amount of Federal Reserve credit
outstanding as measured in it's combined bill and
security holdings has risen from 81 8O1 ,217o 900
on Oct, 7th to $2,039578,o0O for the week ending
Nov. 18th. AT this point decline may be noted
in the amount of Federal Reserve credit out
standing to 1888 227,000 for the week ending
Dec. End This decline as well as. a slightly
downward movement in several of the preceding
weeks is doubtless the result Of the efforts of
the Federal Reserve Banks at a cessation of the
inflationary movement. tt has tried to check
this source of initiation by raising its rediscount
rates. Yet even at this low figure the amount
OF such credit is $709,81 900 in excess of the
outstanding total credit a year ago.
The ratio of reserves to liabilities according
to the report of the Federal Reserve Bank of
Dec. 2, stood at 621 per cent as compared with
762 per cent for the same week last year Due
to nlanipulationS by the Federal Reserve Bank
the published reserve ratio figure must not be
accepted at It's face value. When the prospects
Tor the tnflationary movement getting beyond
control became evident, a species of financial
jugglery was resorted to- The Federal Reserve
Bank issued paper notes in return for which it
received gold notes. Since it is required by law
to hold only 40 per cent reserve on its outstand-
ing notes, it added the remaining 60 per cent to
its gold reserves, thus bolstering up its shaky
position. The ineffectiyeness of such method
of checking initiation has been recognized by
bourgeois economists. The Financial Chronicle
comments upon it in such manner as to gently
chastise the Federal Reserve for concealing from
the eyes OF the financial world the real extent
OF the lnflationary movement. In its Dec
issue, 1t says:
Evidently this process has been resorted to
In recent weeks. II follows that the improve
ment in the ratio of reserves does not possess
the significance it otherwise would have"
The tremendous increase in boarded money
is factor of decided Importance in gaugng the
extent OF initiation. Under the term money in
circulation" it is used by bourgeois economists
as sign Of capitalist healthiness. This denti-
fication of boarded money with money in cir
culatlon is the cause Of much confusion in the
minds of bourgeois economists and has led to
statements that the crisis is being overcome
whereas In reality it is being deepened PRE-
CISELY BECAUSE OF THE OPERATION OF
THOSE FACTORS WHICH BOURGEOIS
ECONOMISTS REGARD AS A. SYMPTOM OF
CAPITALIST RECOVERY
The extent and increase in boarding can be
seen very graphically in the chart presented in
the "Annalist" for Nov 9th Although the
chart is headed money In Circulation" it is
obvious that toward the end of 1880 and thru
out the year 1881 we are dealing with boarded
money. o. MONEY OUT OF CIRCULATION.