contain the one memorable contribution of an author to the advancement of the science. Incidentally, the collection of a large number of readings from a wide range of writers over a long period of time is an excellent introduction of the student to the literature of the subject. It may lead to further reading and study; but even if this goal is not attained, the student can hardly fail to realize that all of monetary wisdom and experience is not contained within the covers of a single book.

A collection of carefully edited readings and materials also makes possible the presentation of a much larger volume of data by virtue of the elimination of extraneous and repetitional matter. In order to supplement a text most teachers assign to the student a list of collateral readings bearing on the topic in hand and chosen with the idea of showing the student what writers other than the author of the text have to say on the subject, and, so far as is possible, presenting to him various points of view. The teacher is usually handicapped in this because in the ordinary library there is a limited supply of material of the documentary and pamphlet variety, while in many libraries the problem of a sufficient number of the formal standard treatises is a pressing one. But even where the library material is adequate, there is usually a great and needless duplication of effort on the part of the student. It may probably safely be said that as a rule something like one-half of such readings are practically duplications, and that another 25 per cent is extraneous matter, so far as the problem in hand is concerned. Someone has remarked in this connection that the system is really based on the labor theory of value. A more probable explanation, however, is that it is the product of necessity, being used only for want of something better. In any event there appears to be little justification for such duplication in view of the wealth of valuable material that cannot be covered under the most favorable conditions.

It is recognized that various objections may be raised in this connection. It may be urged, for instance, that a certain amount of repetitional reading is of value to the student. Now, while this is doubtless true for a certain amount, it hardly holds for any amount or for the usual amount. A frank talk with almost any serious-minded student brings out the statement that the student is prone to acquire the habit of reading one assignment and merely glancing at or wholly passing by the others, with the comforting reflection that it is the same "stuff" anyhow. While a good part, indeed, is usually

a virtual duplication, there are generally some paragraphs or sections which present new material of genuine importance. These the student all too frequently misses.

Again, it may be argued that."too carefully condensed and edited" readings result in the student's losing a valuable training in sifting chaff from the wheat. The analysis of a complete chapter or article either for the purpose of evaluating the whole or for picking out and making use of only such portions as bear on the topic in hand lunquestionably gives a training that is of much importance. It seems to me, however, that the necessary training along this line may be gained without following this method exclusively, or even primarily. A considerable number of collateral readings of the type under consideration should certainly be used with a book of care'fully edited readings and materials as well as with a formal textbook. Term papers or special reports may, of course, serve a similar purpose. Where the method is followed exclusively, however, the student frequently rebels or grows careless, with the result that he does not acquire the training intended.

The most serious obstacle to the independent use of a book of materials would seem to lie in a possible lack of unity in the volume. 'There is danger that the student may not see the relations between different chapters and divisions of the subject as well as when they are tied together by the thread of a formal treatise by a single author. In the present volume an effort has been made to overcome this shortcoming of the method by means of an introductory statement for each chapter which attempts to give a setting for the readings to come to relate them to what has gone before and to indicate their trend and purpose. It is probable, however, that even with this aid the teacher will have more interpreting to do than with a formal text. But if the idea underlying the method is sound, he will find more than compensating advantages.

However, in all this pedagogical theorizing I recognize that I may well be in error. And especially do I appreciate that we are not all of the same pattern, and that what is a good method for one teacher may prove very bad for another. If, therefore, this volume does not commend itself for independent use, I hope there may be some who will find in it material that will prove useful in a collateral capacity.

In adapting the various selections to the needs of this volume I have endeavored to do no violence to the views of the various authors. In many cases, however, there have been substantial

omissions of material regarded as extraneous so far as the purpose to be served here is concerned, while in numerous others but a few paragraphs of an article or chapter are given, the purpose being merely to express a point of view or to present certain factual material. I must, of course, disclaim responsibility for the views and opinions expressed in the various selections, for many of them are presented merely for pedagogical purposes. There are numerous contradictory readings and many others that contain faulty analysis, chosen to serve merely as the basis for classroom discussion out of which principles may be developed. The unsigned readings are of two kinds: those taken from documents, reports, etc., the references being given in footnotes; and those written by myself. My own contributions have been written because of inability to find concise or satisfactory statements by others on topics regarded as essential to the unity or completeness of the treatise. It has seemed unnecessary to prepare a voluminous index to the volume in view of the complete table of contents.

The great number of selections makes individual acknowledgments out of the question here, and I can only appreciatively state that, with a single exception, I have received from publishers and authors the most courteous permission to use the materials desired. I am under heavy obligation to my former colleague, Professor Walton H. Hamilton, of Amherst College, for many suggestions growing out of almost daily discussions on method and organization. Professor James D. Magee, of the University of Cincinnati, has given a number of valuable suggestions; and Professor Walter W. Stewart, of the University of Missouri, who has read most of the manuscript in Part II, has given many helpful criticisms on this portion of the work. Finally, I am deeply indebted to the spirit of co-operation and team play in the department with which I am associated, the numerous conferences and informal discussions on the many problems involved in economic instruction having been of the very greatest assistance.

UNIVERSITY OF CHICAGO

April 1, 1916

H. G. M.

INTRODUCTION: SCOPE AND ORGANIZATION

Events in the field of money and banking in recent years have resulted in a substantial shifting of interest in the subject on the part of both the general public and professional economist. The two most conspicuous occurrences are of course the final disappearance of the bimetallic controversy two decades ago and the recent thoroughgoing revision of the national banking system. But in addition to these important changes, many new subjects have pressed forward for attention, among which may be mentioned the development of agricultural credit facilities and of the numerous types of co-operative loan associations and the enormous growth of investment banking. These important developments have seemed to me to necessitate a considerable reorganization in the subject-matter of a general course in the principles of Money and Banking, as well as numerous changes in the relative emphasis to be placed on the various aspects of the subject.

Writers of the school of Dunbar and Walker and their followers were naturally primarily concerned with the financial problems that were uppermost in their time. Accordingly, on the money side they stressed the bimetallic and government paper-money controversies, and on the banking side the operation and regulation of "commercial" banking as exemplified under the national banking system. These questions were all approached from the standpoint of an active present interest and were consequently treated in a more or less controversial manner; that is to say, it seemed of paramount importance at the time to promote sound thinking to the end that "sound money" might be secured. These monetary controversies of a former generation are, however, not relevant to present-day practical interests; they have been superseded by new issues. In the present volume, therefore, the readings on money have been developed and arranged so as to place these controversies in a historical setting in their relationship to the whole development of monetary science. While in the banking field most of the problems of an earlier generation remain for present-day discussion, the important developments that have lately occurred also necessitate, as already indicated, substantial modifications in the methods of analysis.

But irrespective of these changes, it has long seemed to me that the field of Money and Banking has been unduly narrowed by most writers on the subject. The well-known functions of money as a common denominator of value, medium of exchange, etc., are not the only, nor, from some points of view, the most important, functions of money. The usual "scientific" analysis of money fails to indicate the enormous rôle that it plays in the everyday world of affairs, and furnishes a wholly inadequate basis for an understanding of the monetary controversies of history. Similarly, the usual text on banking confines the discussion to such banks as create media of exchange in the form of notes and checks. The present volume attempts to treat both money and banking from a much broader standpoint and to bring the general subject into more vital relationship with actual business affairs.

Part I is divided into eight chapters. It begins with the pecuniary organization of society, covers the origin of money and the evolution of the precious metals, and the history of paper money and bimetallism with particular reference to American experience, and ends with a descriptive analysis of the present system in the United States. It is in connection with chap. i, "The Pecuniary Organization of Society," that the chief departure is made from the customary treatment of money. This chapter is divided into three sections, as follows: (A) "The Nature and Functions of Money"; (B) "Money, Capital, and Wealth," and (C) "The Rôle of Money in Industrial Society." The first of these is typical and treats of the classic economic functions performed by money in industrial society. The second portrays the confusion that has always existed in the popular mind with reference to money and capital and wealth, while the third is designed to show the relation of the price system to the orgamzation of industrial society in general and the psychological effects of this pecuniary organization on the daily activities of man. The general purpose of this first chapter taken as a whole is to pave the way for an appreciation of the monetary history which follows.

There is an economic side to all the monetary controversies through which we have passed, but there is also another side one which from a practical standpoint has been of much greater importance. Debasements of the coinage, the demand for the retention of bimetallism, and the numerous paper-money agitations of history have all been vitally connected with the prevalent desire for more money, in the belief that more money means more wealth. Without this