¹ It is not suggested that the evenness of impact would show itself, even under ideal conditions, in equal percentage declines in all the investment-goods industries affected. The magnitude of decline in the output of the various industries will depend on the slope of the marginal efficiency schedule for the various types of capital goods involved.

² London, 1936, chap. xii. This parallel was first pointed out to me by Professor G. A. Elliott Notice that the volume of new bank-lending does not provide a sufficient measure of the importance of the banking system in a capital market in which many of the other large lending-institutions (insurance and trust companies, pension funds, etc.) sometimes tend to adopt a relatively inflexible attitude to the composition of their portfolios. Thus the chartered banks probably dominate the market for short-term funds of all sorts, and are exceedingly influential in the market for some types of longer-term loans.

³ Wolfe, J. N., “Canada';s Present Money Problems,” Business Quarterly (University of Western Ontario), XXII, no. 1, spring, 1957, 53–67.Google Scholar The present paper provides a more considered judgment on some of the issues raised in that essay.

⁴ This argument assumes stable interest rates in the United States but could easily be amended to fit different assumptions.

⁵ The events of the six months between the preparation of this paper and its publication have supported this suggestion to a degree which had hardly been foreseen. The relaxation of a crisis atmosphere would be doubly beneficial if it were utilized for sober and unhurried consideration of mechanisms for meeting a recurrence of the emergency.