Loading ...PREFACE
This volume is the result of four years of experimentation in the teaching of an introductory course in Money and Banking. It is not a book of collateral readings or materials in the ordinary sense, but is designed to serve the purpose of a text and at the same time to give the student a breadth of view, a contact with reality, a stimulus to independent thinking, and a training in judgment and discrimination
which are not afforded by the formal textbook. In a word, an attempt has been made to combine in one volume the virtues of both the text and collateral readings, and as far as possible to eliminate their defects. To this end there has been selected a large number of comparatively short arguments, expressions of opinion, and points of view, supplemented by source materials, charts, tables, etc., which, while covering the principles of money and banking as adequately as the ordinary text, avoid the dogmatic tendencies inherent in the textbook method and retain the suggestiveness of collateral readings without their usual bulkiness and admixture of irrelevant material. These numerous selections have, it is believed, been welded into an organic whole, and unity of treatment has been secured, not only by careful arrangement, but by means of general introductory statements prefaced to each chapter or division. As a further aid to the orderly unfolding and development of the subject the volume is accompanied by a series of questions and problems based upon the readings and published separately under the title: “Exercises and Questions in Money and Banking.” During the four years of experimentation with the subject, a large proportion of the selections in this volume have, in mimeographed form, been repeatedly tested by classroom use. The exercises and questions have been developed with the readings and also tried out in class, with the result that after each trial there has been a very considerable revision, not only of the questions, but of the arrangement and organization of the readings as well. Moreover, these revisions have usually been made immediately following the class sessions from day to day, while the improvements suggested by the classroom discussions were fresh in mind.
The volume was originally intended to be used in a collateral capacity with a formal textbook; but as the number and variety of selections increased, the need for the text appeared to grow less and less, until in my own teaching I now prefer to use the volume independently of a textbook. Much of the material in Part 11 has also been used in mimeographed form by an instructor in another institution with a similar result; in the first semester it was used with a text, while in the second semester the text was discarded. This experience has led me to believe that the book may find its greatest use in an independent rather than a collateral capacity.
The main purpose of a preface, I take it, is to reveal the point of view of an author, or perhaps, more accurately speaking, to disclose his hobby. My own “view” just at present is that if it comes to a choice between a volume of this sort and a formal textbook as the basis of a course in Money and Banking the advantage lies with the book of selected materials. If the reader will bear with me I should like to present the reasons for my faith.
If the purpose of education is merely to supply students with predigested information, then the text is eminently satisfactory. A student may, however, commit to memory the principles laid down in the text, recite them in class, and write them down in examinations, and still be not very much the wiser. For the usual text does not in itself provoke thought and discussion to any great extent or lead to careful analysis on the part of the student: these desiderata come only through a challenge to the intelligence; and this challenge is best made by means of the presentation, not only of conclusions, but of the materials necessary to the formulation of conclusions. To reach a full understanding of the principles of economics it would seem to be necessary that the student should evolve, with the guidance and aid of the instructor, his own conclusions and principles.
This does not imply an inductive method in the sense that the beginning student is to digest the vast data and raw material bearing on a subject like Money and Banking and reach his conclusions after a tedious process of analysis and synthesis. On the contrary, the readings in this volume contain rather less of raw material and rather more of conclusions and matured opinions of authorities in the field, together with the conflicting views of various groups or classes in society. The method may be called inductive only in so far as the student’s own conclusions are made to result from an analysis and weighing of conflicting views, opinions, and arguments. This must, of course, be coupled with much deductive reasoning, and it is doubtless best to refer to it simply as the discussion method without raising the time-honored controversy over induction and deduction.
The presentation of varying points of view and of the philosophies of different social groups, together with conflicting opinions and conclusions of experts in the field., appears to me indispensable to a genuine appreciation of the subject. A very serious problem in the complex life of modern times lies in the specialized or group points of view tremendous role that money has played in society is not usually revealed. Viewed from a broader outlook, the history of money becomes one of the most interesting and human phases of social and economic progress.
A word should be said with reference to the treatment of paper money. It has been customary to discuss the history and principles of regulation of paper money without differentiating between government and bank paper. For instance, Jevons gives an indiscriminate list of the methods that have been employed in the regulation of paper money, some of them relating merely to government paper and others to bank paper. Any attempt to discuss the principles of bank paper money, however, appears to me futile until the student has studied the principles of banking. While, historically speaking, many of the government schemes involved the use of banks as agents, and while the motive for an issue by banks was often not different from that by a government direct, nevertheless the principles governing the regulation of issues by banks are very different from those applying to government issues. In this volume, therefore, bank paper money is not taken up until after the principles of banking have been discussed.
Treatises on banking are usually devoted solely and as a matter of course to what is commonly called ”commercial ” banking. Indeed, banking and “commercial ” banking have been very generally regarded as synonymous terms. Bagehot remarks, for instance, that the Rothschilds are great capitalists but not bankers, while Dunbar in True, the public has frequently been concerned over falling or rising price levels. Creditors have wished falling prices, or at least opposed a depreciation of the standard, while debtors have frequently desired a cheaper standard of deferred payments. But this question of changing price-levels has been very closely associated in the popular mind with the volume of the currency.
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