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The Decline in the Ratio of Banking Capital to Liabilities

Wesley C. Mitchell
The Quarterly Journal of Economics
Vol. 23, No. 4 (Aug., 1909), pp. 697-713
Published by: Oxford University Press
Stable URL: http://www.jstor.org/stable/1883524
Page Count: 17
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The Decline in the Ratio of Banking Capital to Liabilities
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Abstract

I. The Decline has taken place, for the national banks, by abrupt drops in periods of business revival, with steadiness in intervening periods, 697.--Has extended to all classes of banks, 698.--Due proximately to rapid increase of deposits, with stationary capital, 699.--II. The main cause has been an increase of lawful money supplied to the banks by the general public, 703.--III. The same tendency appears in the English banks, the Canadian banks, the State banks, 708.--IV. The decline not necessarily an indication of weakness, 712.