Government debt was the subject of this first installment of a planned (perhaps completed later) bibliography for a course on fiscal policy that was prepared by Carl Shoup (New York Times obituary). This draft with a few hand-corrections was found in the papers of his colleague in public finance, Robert Haig.
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Economics b160—Fiscal policy. 3 points. Spring Session. Professor Shoup. M. W. 9. 710 Business.
A study of the reasons why governments choose to follow a policy of deficit financing, balanced-budget financing, or surplus financing, as the case may be, with emphasis on the economic forces that influence these decisions and on the economic results of the various policies. Topics discussed include war finance, compensatory spending in a depression, public finance aspects of theories of long-term investment stagnation, and the problems of the interest charge on the budget and the growing stock of money that may be associated with a great increase in the public debt.
Source: Columbia University. Announcement of the Faculty of Political Science for the Winter and Spring Sessions, 1947-1948, p. 50.
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[Pencilled Note: “For Dr. Haig. (Parts II, III, IV to follow)”]
COLUMBIA UNIVERSITY
SCHOOL OF BUSINESS
BIBLIOGRAPHY, ECONOMICS b160,
FISCAL POLICY
February, 1948
This bibliography is divided into four parts, and each part is further divided into sections. The four parts are:
Part I. Government Debt
Part II. Taxation
Part III. Government Expenditures
Part IV. Fiscal Policy in the United States and Abroad in Recent Years
Most of the sections are directly concerned with government debt, taxation, and expenditures; for these sections an attempt has been made to present a fairly comprehensive coverage of the periodical and book literature of the past three or four years. The readings that are particularly important for purposes of the present course are marked with an asterisk. The asterisked readings have been put on reserve in the School of Business library.
A few sections are concerned with topics that are only collateral to fiscal policy: for example, the technique of bank deposit expansion, and data on recent changes in amount of currency outstanding. In these sections the references are highly selective, being designed only to assist the student to refresh his background, or to suggest a minimum of reading.
PART I: GOVERNMENT DEBT
- Technique of Credit Creation by the Banking System
- Technical Characteristics and Pattern of Ownership of Each Type of Federal Security
- Non-Negotiable Securities; Securities Ineligible for Bank Holding
- Currency
- Gold and Silver
- Bank Holdings of Government Bonds, and Data on Bank Deposits
- Total Interest Charge on Government Debt
- Interest Rates
- “Burden” of Debt
- Debt Management
- Debt Management and Credit Control
1. Technique of Credit Creation by the Banking System. –The creation of credit by commercial banks is well described in a general way by Bowman and Bach, Economic Analysis and Public Policy (1943), 589-99; but to get a thorough understanding, the student should read J. Brooke Willis, The Relation of Bank Deposits to War Finance (Chase National Bank, November 18, 1942, mimeographed). A description of the Federal Reserve System is given on pp. 636-53 of Bowman and Bach. See also J. E. Horbett, “Banking Structure of the United States,” in Banking Studies, by members of the staff, Board of Governors, Federal Reserve System (1941). Some brief discussions in the Federal Reserve Bulletin may aid in avoiding elementary misconceptions: “Central Banking” (December 1940), “Federal Reserve Bank Lending Power…” (February 1941), “Bank Credit and…Reserves”- (July 1941), “Bank Deposits [and]…Savings Bonds” (August 1941). An explanation of how credit is created under the British banking system, with particular attention to wartime developments, is given in Norman Crump, Facts about British Banks and the War (1943).
2. Technical Characteristics and Pattern of Ownership of Each Type of Federal Security.— The types of security issued by the Federal Government, and the relative importance of each, are given in the monthly Bulletin of the Treasury Department, in the section headed “General Fund Position and Debt Outstanding” (consult any recent issue). Note the names of the different kinds of obligations, their respective interest rates and periods to maturity, as shown in the tables headed “Offerings of Marketable Issues of Treasury Bonds, Notes, and Certificates of Indebtedness” “Offerings and Maturities of Treasury Bills,” “Sales and Redemptions of United States Savings Bonds.—Table 1, Summary…,” and “Sales and Redemptions of Treasury Savings Notes.—Table 1, Summary…” Then study the tables headed “Public Debt and Guaranteed Obligations of the United States Government Outstanding”: “Table 1, Summary;” and “Table 2, Interest-Bearing Public Debt;” then the table headed “Computed Interest Charge and Computed Interest Rate….” Note the data on who owns the federal debt, in the section headed “Ownership of Government Securities.” Study the charts on “Yields of Treasury Securities….”
See also:
Hargreaves, H. W. H., “The Guaranteed Security in Federal Finance,” J.P.E., Aug., 1942.
Mann, F. K., “The Dual-Debt System as a Method of Financing Government Corporations,” J.P.E., Feb., 1947, 39-56.
Simmons, E. C., “The Position of the Treasury Bill in the National Debt,” J.P.E., Aug., 1947, 333-45.
“Treasury Financing Operations,” statement on first page of each issue of Treasury Bulletin in recent issues.
“Direct Exchange of Maturing Treasury Bills for New Issues,” Fed. Res. Bull., May, 1947.
“Treasury Bills and Certificates as Outlets for Idle Funds,” Fed. Res. Bull. July, 1942.
“The Tax Savings Plan,” Red. Res. Bull., Aug., 1941.
3. Non-Negotiable Securities; Securities Ineligible for Bank Holding.—
Secretary of the Treasury, “Spreading the Public Debt,” Treasury Bulletin, May, 1947.
Secretary of the Treasury, “The Role of Savings Bonds in Public Debt Management,” Treasury Bulletin, May, 1947.
Tostlebe, A. S., “Estimate of Series E Bond Purchases by Farmers,” J.A.S.A., Sept., 1945.
“Bank Purchases of Restricted Treasury Bonds,” Treasury Bulletin, July, 1946.
4. Currency.—The wartime rise in currency is described by G. L. Bach, “Currency in Circulation,” Federal Reserve Bulletin, April, 1944. See also the following unsigned articles in the Federal Reserve Bulletin: “The Currency Function of the Federal Reserve Banks,” July, 1940; “Recent Changes in the Demand for Currency,” April, 1942; and “Relation between Currency and Bank Deposits,” May, 1943.
For a historical treatment: V. M. Longstreet, “Currency System of the U.S.” in Banking Studies, Federal Reserve System, 1941. For terminology; I. B. Cross, “A Note on the Use of the Word ‘Currency,’” J.P.E., December, 1944.
5. Gold and Silver.—The vast literature in recent years on the gold situation in general will not be considered here; however, reference by be made to F. D. Graham and C. R. Whittlesey, Golden Avalanche, 1939. For the place of gold in the present U.S. money and credit system, see Bowman and Bach, Economic Analysis and Public Policy, Chapter 42, “Gold and the Price Level,” and a series of notes in the Federal Reserve Bulletin: “Ownership of the Monetary Gold Stock” (May, 1940), “Utilization of the Monetary Gold Stock” (June, 1940), “The Gold Stock” (September, 1940), “Definition of Lawful Money” (July, 1941), and “Money and Inflation” (March, 1944). The Treasury position on gold was stated by Secretary Morgenthau in two press releases, March 23, 1939 (reply to Senator Wagner’s questions) and May 3, 1940 (address before National Institute of Government).
6. Bank Holdings of Government Bonds, and Data on Bank Deposits—An appreciation of the quantitative aspects of the bank-credit expansion of the war and postwar years can be obtained from “The Wartime Expansion of Liquid Assets,” Fed. Res. Bull., Oct., 1944, and from “Estimated Liquid Asset Holdings of Individuals and Business,” Fed. Res. Bull., Sept., 1947, and earlier reports on the same subject in the issues of June, 1945; Feb., 1946; and Nov., 1946.
See also:
Robinson, Roland I., “Money Supply and Liquid Asset Formation,” A.E.R., March, 1946.
Warburton, Clark, “Quantity and Frequency of Use of Money in the United States, 1919-45,” J.P.E., Oct., 1946.
“Ownership of Demand Deposits [as of Feb. 26, 1947],” Fed. Res. Bull., June, 1947.
* “Assets and Liabilities of Commercial Banks and Mutual Savings Banks, December 31, 1939-1946.” Treasury Bulletin, July, 1947.
“Measurement of Factors Influencing the Volume of Deposits and Currency,” Fed. Res. Bull., June, 1944.
“Wartime Monetary Expansion and Postwar Needs,” Fed. Res. Bull., Nov. 1945. For the growth in deposits prior to the war, see “Factors Responsible for Increase in Bank Deposits,” Fed. Res. Bull., March, 1941.
7. Total Interest Charge on Government Debt.—
“Transfer to Treasury of Excess Earnings of Federal Reserve Banks,” Fed. Res. Bull., May, 1947, 518-19.
Rolph, Earl R., “The Payment of Interest on Series E Bonds,” A.E.A. Proceedings., May, 1947, 318-21.
Shoup, Carl, “Postwar Federal Interest Charge,” A.E.R., Supplement to June, 1944 issue (“Implemental Aspects of Public Finance”).
8. Interest Rates.—The average rates (including the case of zero interest) and the structure of interest rates of the public debt are discussed particularly in the following articles. The recent United States experience is analyzed in:
Coleman, G. W., “The Effect of Interest Rate Increases on the Banking System,” A.E.R., Sept. ’45.
Harris, S. E., “A One Per Cent War?” A.E.R., Sept. ’45.
*Samuelson, Paul A., “The Effect of Interest Rate Increases on the Baking System,” A.E.R, March, 1945.
Samuelson, P. A. “The Turn of the Screw [Interest Rates and the Banks],” A.E.R., Sept. ’45.
Seligman, H. L., “The Problem of Excessive Commercial Bank Earnings,” Q.J.E., May, 1946.
*Seltzer, L. H., “Is a Rise in Interest Rates Desirable or Inevitable?” A.E.R., Dec., 1945.
Wallich, Henry C., “The Changing Significance of the Interest Rate,” A.E.R., Dec. 1946.
Willis, J. Brooke, “The Case against the Maintenance of the Wartime Pattern of Yields on Government Securities,” A.E.A. Proceedings, May, 1947.
“Yields on United States Government Securities—Revision of Averages,” Fed. Res. Bull., Oct., 1947.
The wartime position of the United States Treasury on interest rates was stated by Secretary Morgenthau in three addresses printed in the Treasury Bulletin, Nov. 1944.
Recent British discussion includes:
Henderson, H., “Cheap Money and the Budget,” E.J. Sept., ’47.
Paish, F. W., “Cheap Money Policy,” Economica, Aug., 1947.
The particular case of interest-free financing has been the subject of some debate recently; see:
Poindexter, Julius C., Proposals for Interest-Free Deficit Financing. Ph.D. Virginia, 1944 (May be obtained on inter-library loan).
Poindexter, J.C., “Fallacies of Interest-Free Deficit Financing,” Q.J.E., May, 1944.
Wright, D. McC., “Interest-Free Deficit Financing: a Reply,” Q.J.E., Aug., 1944.
Poindexter, J. C., “Interest-Free Deficit Financing: Rejoinder [to Wright’s article],” Q.J.E., Nov. 1945.
Poindexter, J. C., “A Critique of Functional Finance through Quasi-Free Bank Credit,” A.E.R., June, 1946.
Benoit-Smullyan, Emile, “Interest-Free Deficit Financing and Full Employment [Poindexter’s article],” A.E.R., June, 1947.
Pritchard, L. J., “The Nature of Bank Credit [Poindexter’s article]: A Comment,” A.E.R., June, 1947.
In view of the recent changes in the interest rate structure, the forecasts of a few years ago are worth reviewing:
Morgan, E. V., “The Future of Interest Rates,” E.J., Dec., 1944.
Round Table, “The Future of Interest Rates,” A.E.A. Proceedings, March, 1943.
Riddle, J. H., “The Future of Interest Rates,” Bankers Magazine, March, 1943.
9. “Burden” of Debt.—Interest and amortization requirements on the public debt lead to a discussion of the degree to which a domestically held debt is a burden. On this topic, see:
*Kalecki, M., “The Burden of the National Debt,” Bull., Oxford Inst. Stat., April 3, 1943.
Ratchford, B. U., “The Burden of a Domestic Debt,” A.E.R., Sept., 1942.
Wright, D. Mc., “Mr. Ratchford on the Burden of a Domestic Debt: Comment,” A.E.R., March, 1943.
*Hansen, A. H., “The Growth and Role of Public Debt,” Ch. IX, especially pp. 135-44, 152-61, 175-85, in Fiscal Policy and Business Cycles.
Harris, S. E., “Postwar Public Debt,” Chapter X in Postwar Economic Problems;
Mitnitzky, Mark, “Some Monetary Aspects of Government Borrowing” A.E.R., March, 1943.
Hahn, A., “Should a Government Debt, Internally Held, Be Called A Debt at All?” Banking Law Journal, July, 1943.
Domar, E. D., “The ‘Burden of the Debt’ and the National Income,” A.E.R., Dec., 1944.
Ratchford, B.U., “Mr. Domar’s ‘Burden of the Debt,” and rejoinder by Domar, A.E.R., June, 1945, 411-14.
10. Debt Management.—More comprehensive discussions of the problems posed by the public debt are found in writings on “debt management,” “limits to the debt,” etc. (see also the references in No. 11 below):
*Abbott, Charles C., Management of the Federal Debt, McGraw-Hill, 1946, 187 pp., Rev. in A.E.R., March, ’47.
*Committee on Public Debt Policy, National Debt Series, Nos. 1 to 4 issued in 1947. 12 to 22 pp. each.
Garritsen, Margaret M., Some Theoretical and Practical Problems in the Management of the Federal Debt in the Postwar Period. Ph.D., Mass. Inst. of Tech. 1946. (May be available on inter-library loan.)
*Hansen, A. H., “Federal Debt Policy,” Proceed., N.T.A., 1944, 256-67, 295-97.
Leland, Simeon E., “Management of the Public Debt after the War,” A.E.R., Supplement to the June 1944 issue (“Implemental Aspects of Public Finance”), and discussion by D. T. Smith and L. H. Seltzer.
Leonard, Norman H., Public Debt Management. Ph.D. Yale (no date given). (May be available on inter-library loan.)
Mehta, J. K., “Some Problems of Public Debt,” South Indian Journal of Economics, Feb., 1946.
Neale, E. P., “The Growth of New Zealand’s General Government Debt,” Eco. Record, Dec. 1945.
Neumark, F., “Limite de la dette publique ou deficit permanent?” L’Egypte Contemp., March, 1946.
Ratchford, Benjamin U., “History of the Federal Debt in the United States,” A.E.A. Proceedings, May, 1947, 131-41; discussion by L. Wilmerding Jr. and C. C. Abbott, 151-56.
Suiter, William O., “Some Questions Relative to the Management of the National Government Debt,” Bull. N.T.A., June, 1946.
Wallich, H. C., “La dueda publica y el ingreso nacional de Estados Unidos,” El Trimestre Econ., Jan. and April, 1946.
*Wallich, H. C., “Debt Management as an Instrument of Economic Policy,” A.E.R., June, 1946.
Wickens, Aryness Joy, “The Public Debt and National Income,” A.E.A., Proceedings, May, 1947.
Woodward, Donald B., “Public Debt and Institutions,” A.E.A. Proceedings, May, 1947, 157-83. Discussion by L. H. Seltzer, Susan S. Burr, R. J. Saulnier and E. A. Goldenweiser.
11. Debt Management and Credit Control.—The complex relations that link debt management and credit control have received increasing attention in recent years as evidenced by the following articles. The discussion is chiefly in terms of inflationary rather than deflationary conditions.
Abbott, Charles C., “The Commercial Banks and the Public Debt”; discussion by H. H. Preston, A.E.A. Proceedings, May, 1947.
Arndt, H. W., “The Monetary Theory of Deficit Spending: A Comment on …. Warburton’s Article [in RES, 1945, 74-84].” R.E.Stat., May, 1946.
Bach, George L., “Monetary-Fiscal Policy, Debt Policy, and the Price Level,” A.E.A. Proceedings, May, 1947.
Carr, Hobart C., “The Problem of Bank-Held Government Debt,” A.E.R., Dec. 1946.
Chamberlain, N. W., “Professor Hansen’s Fiscal Policy and the Debt”; rejoinder by Hansen, A.E.R., June, 1945.
Cluseau, M., “De quelques definitions necessaires,” Rev. de Sci. et Législ. Fin., April, 1947.
Eccles, M. S., “Sources of Inflationary Pressures,” Fed. Res.Bull., Feb. 1946.
*Eccles, M., “Methods of Restricting Monetization of Public Debt by Banks,” Fed. Res. Bull., April, 1947.
Eccles, M. S., “The Current Inflation Problem—Causes and Controls,” Fed. Res. Bull. Dec., 1947.
Goldenweiser, E. A., “Federal Reserve Objectives and Policies: Retrospect and Prospect,” A.E.R., June 1947.
Hauge, Gabriel, Banking Aspects of Treasury Borrowing in World War II. Ph.D., Harvard, 1947 (Available only on inter-library loan.)
*Hardy, C. O., “Bank Policy versus Fiscal Policy as an Economic Stabilizer,” Proceed. Nat. Tax Assn., 1946.
Lerner, Abba P., “Money as a Creature of the State,” A.E.A. Proceedings, May, 1947.
Mikesell, Raymond F., “Gold Sales as an Anti-Inflationary Device,” R.E.Stat., May, 1946.
Mints, Lloyd W., Hansen, A. H., Ellis, Howard S., Lerner, A. P. and Kalecki, M. “A Symposium on Fiscal and Monetary Policy,” R.E.Stat., May, 1946.
Robinson, R. I., “The Reserve Position of the Federal Reserve Banks,” Fed. Res. Bull., March, 1945.
Seltzer, Lawrence, “The Changed Environment of Monetary-Banking Policy”; discussions by D. B. Woodward and R. A. Young, A.E.A. Proceedings, May, 1946.
*Simons, Henry C., Economic Policy for a Free Society, Univ. of Chicago Press, 1948, 353 pp. espec. Chs. VII, “Rules versus Authorities in Monetary Policy,” VIII, “Hansen on Fiscal Policy,” IX, “On Debt Policy,” X, “Debt Policy and Banking Policy” and XIII, “The Beveridge Plan: an Unsympathetic Interpretation.”
Sproul, Allan, “Monetary Management and Credit Control,” A.E.R., June, 1947.
Sweezy, Alan R., “Fiscal and Monetary Policy”; discussion by J. H. G. Pierson, W. J. Fellner, and Clark Warburton; A.E.A. Proceedings, May, 1946.
Villard, H. H., “The Problem of Bank-Held Government Debt: Comment [on Carr’s article],” A.E.R., Dec. 1947.
Wallace, Robert F., “The Federal Debt and Inflation,” Bull. N.T.A., June, 1947.
Wallich, H. C., “The Current Significance of Liquidity Preference,” Q.J.E., Aug., 1946.
*Warburton, Clark, “The Monetary Theory of Deficit Spending,” R.E.Stat., May, 1945, 74-84.
Warburton, Clark, “Monetary Theory, Full Productivity, and the Great Depression,” Econometrica, April, 1945.
Warburton, Clark, “The Volume of Money,” J.P.E., June 1945.
Whitaker, T. K., Financing by Credit Creation, Dublin, 1947, 67pp. (E.J., Sept. ’47.)
Whittlesey, C. R., “Federal Reserve Policy in Transition,” Q.J.E., May, 1946.
“Treasury Finance and Banking Developments,” Fed. Res. Bull., May, 1946.
* “Debt Retirement and Bank Credit,” Fed. Res. Bull., July, 1947.
Source: Columbia University Libraries, Manuscript Collections. Robert M. Haig Collection. Box 16, Folder “Bibliography”.
Image Source: The Columbia Spectator Archive. March 8, 1967.