Since the time of the Currency School, the policy adopted by the governments of Europe and America with regard to the issue of fiduciary media has been guided, on the whole, by the idea that it is necessary to impose some sort of restriction upon the banks in order to prevent them from extending the issue of fiduciary media in such a way as to cause a rise of prices that eventually culminates in an economic crisis. But the course of this policy has been continually broken by contrary aims. Endeavors have been made by means of credit policy to keep the rate of interest low; “cheap money” (that is, low interest) and “reasonable” (that is, high) prices have been aimed at. Since the beginning of the twentieth century these endeavors have noticeably gained in strength; during the war and for some time after it they were the prevailing aims.

The strange vicissitudes of credit policy cannot be described except by passing in review the actual tasks that it has had to solve and will have to solve in the future. Although the problems themselves may always be the same, the form they assume changes. And, for the very reason that our task is to strip them of their disguises, we must first study them in their contemporary garb. In what follows, separate consideration will be given to such problems, first, as they exhibited themselves before the war, and then, as they have exhibited themselves in the period immediately after the war.1

• 1[Some of the problems that have arisen since are referred to on pp. 14-22. H.E.B.]