INFLATIONARY INFLUENCES.
It must not be supposed, however, that the chief impetus to this upward movement in the speculative markets has come from British buying in Wall Street, however much such buying may have given an initial fillip. The main influence has come from what is sometimes described as the adoption of an inflationary policy in the United States. Briefly, though imperfectly described, the sequence of .events has been somewhat as follows. Sonic months ago when things were at their worst in America and confidence was shaken to the point of hoarding by the public and an efflux of gold from the States, the authorities at Washington began a system of credit ex- pansion, the first move being in the direction of enlarging the lending powers of the Federal Reserve Banks. By this action the stores of gold held by the Federal Reserve Banks became more easily available as a basis for new credits and development had a good effect upon the (Continued on page 328.)
Finance—Public and Private
(Continued from page 326.) mentality of the American public. The Authorities, however, soon adopted other measures to supplement and speed up as it were the effect of the broadening of the basis of credit. Reconstruction financial corporations were formed with large capital, the object being to relieve the banks of frozen positions, while later, corporations were formed having for 'their avowed purpose the making of loans to finance the purchase and -carrying of commodi- ties with a view to raising prices and stimulating trade activity.
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