In an earlier paper, I presented an analysis of the intermediate-run effects of instalment credit control, that is, the effects prevailing after the new credit terms have fully replaced the old ones. Although brief reference was made there to the effects of control in the short run, that is, in the time periods immediately following the change in credit terms, yet several interesting questions regarding the short run had to be ignored because of the scope of that paper. One may ask, for example: Does the down-payment effect tend to grow or diminish in strength from one period to the next during the transition from old credit terms to new ones? What about the maturity effect? Do these effects change with time, if at all, at a steady rate? In one direction only, or with reversals)? And how will different types of consumer reaction to new credit terms, as reflected in the amount of credit purchases, modify the down-payment and maturity effects, especially when there is perversity? These questions are important because for purposes of credit control policy, the short-run effects are in many cases more relevant than the intermediate-run effects. The present paper seeks to answer these questions.

As the questions themselves suggest, the following discussion will be principally concerned with the delineation of the time paths of effects of credit term changes. In this sense, then, the paper pertains to the realm of “dynamics,” in contrast to the comparative-statics orientation of the earlier article. As in the earlier paper, I shall assume (a) a constant rate of growth of credit purchases before control, (b) uniform down-payment and maturity terms on all credit purchases, (c) straight-line amortization of all instalment debts, and (d) the absence of secondary effects. But instead of assuming that new credit terms will always result in a new (fixed) rate of growth of instalment purchases, I shall also consider several other types of consumer reaction. Finally, to make the analysis more general, the concept “marginal propensity to cut outlays for down payments” will be introduced, to supplement the “marginal propensity to cut outlays for instalments” used in the other paper.

Monetary policy in the United States since 1950 has involved the abdication of fairly traditional powers by the authorities and a retreat to an orthodoxy reminiscent of the earlier years of this century. In the course of this retreat the monetary (and fiscal) authorities have sought to reduce federal debt to a quasi-private character, while, in contrast, the government has elevated vast amounts of private debt to a quasi-federal status. It will be argued here that in the light of the changing institutional environment, the drive to monetary orthodoxy plus an undue preoccupation with inflation are in large measure responsible for making exasperatingly difficult the maintenance of orderly Treasury finances and may be self-defeating with respect to the control of inflation.

For our purposes, modern Federal Reserve policy has its roots in the bond support policy of the Second World War. Actions taken after the War until 1950 showed an attitude of increasing restiveness with that policy and involved “chipping away” at individual items in the policy. With the outbreak of the Korean War in 1950, Federal Reserve relations with the Treasury, which sought to maintain a “pegged” market, reached a low point. In March, 1951, came the famous Accord, with virtually unconditional surrender by the Treasury in matters of the level and structure of interest rates. In 1952 came the revival of large-scale discounting and the fostering of its use by the authorities.

Important changes were made in the Combines Investigation Act in 1952, and again in 1960; the intervening period provides a suitable unit for the study of operations under the Act. We shall try to account for the changes that were made in 1952 and for the manner in which the Act was administered thereafter, in terms of some basic propositions about the process of government in Canada, which are well known though perhaps not universally accepted. We conclude with a brief discussion of the 1960 revision of the Act.

Canadian governments of both parties must try to avoid policies that will antagonize large blocks of voters. They must also steer clear of policies that will lose them the support of substantial business interests, not only because they depend on business groups for campaign funds, but also because the environment in which government operates is influenced, in a great variety of ways, by the actions and attitudes of the major business groups. Many policy decisions, particularly in non-economic fields, do not involve a conflict between these two objectives. Where there is a conflict, the policy decisions that emerge represent a compromise.

In 1952, when a Social Credit Government assumed office in British Columbia, the net public debt stood at $190 million. On August 1, 1959, the public debt was declared nil, and a document confirming this declaration was issued by the Comptroller General and the Deputy Minister of Finance. To celebrate the debt-free status of the province, a bond-burning ceremony was held in Kelowna. In summing up the record of his Government, Premier Bennett stated: “It took 70 years to build the debt; it took 7 years of Social Credit to wipe it out.” To consolidate this claim and to affirm the continuing rectitude of the Government, the legislature, in the 1960 session, passed a bill cancelling the borrowing powers of the province.

Taken at their face value these developments suggest a high degree of fiscal integrity. Taken in conjunction with an increase in capital expenditures far in excess of the increased revenues of the province, they have aroused confusion and bitter opposition. The paradox of debt elimination coincident with increased capital expenditures will be the subject of this paper. We shall examine, firstly, the techniques and, secondly, the apparent objectives of the Social Credit Government.

The distribution of urban peoples and activities among cities of various sizes and characteristics has for a long time interested social critics, town planners, geographers, historians, journalists and some economists in western Europe and the United States. A common theme is that the distribution of urban peoples depends on the distribution of urban jobs. Thus to understand population changes, the analysis of cities usually becomes a study of trends in job location. A decentralized pattern of industrial jobs is thought conducive to a proliferation of small and medium-sized cities. Or to put it the other way, it is often suggested that the concentration of industrial jobs into large cities is a principal explanation of their size.

For more than half a century social critics and theorists have been predicting a coming era of decentralization in manufactures and, as a consequence, of urban peoples. The development of the automobile and of electricity, the use of mass production techniques in specialized single-storey buildings set on large tracts of land, improvements in telecommunications, a high income elasticity of demand for space—all of these have been suggested as forces tending to decentralize manufacturing employment. But what has in fact been the experience of the last half-century?

The theory of employment that grew out of the Great Depression was not long in influencing government policy-makers and revolutionizing older concepts of fiscal policy. The most important of Keynes's practical lessons, that policies which promote investment and exports and inhibit saving and imports increase employment and output, has now hardened into a dogma and filtered down into almost all the elementary textbooks. The lesson, by and large, was a good one, but the dogma presents the danger that the lesson might be uncritically applied in situations where other government policies render it invalid. This paper is concerned with the most important exception to the rule.

The mercantilist element in Keynesian policies is definitely inapplicable to countries whose central banks do not peg the price of foreign exchange or gold. Tariffs, trade controls, and export subsidies are likely to worsen employment and output in all those situations in which, with a fixed exchange rate, they would improve employment and output. Moreover, if exchange rates are flexible, an increase in investment or government spending, and a reduction in saving or taxation, will have a substantially different effect on employment than that predicted by the traditional foreign trade multiplier. The reason lies in the fact that equilibrium in the balance of payments is automatically maintained by variations in the price of foreign exchange.

The principle of intra-party democracy underlying the so-called constitutional crisis within the Labour party in Great Britain—a struggle between the party conference and the parliamentary party over the creation of defence policy—has for some time been the subject of widespread discussion in academic journals and the “responsible press.” This paper examines the difficulties within the organization of the United Farmers of Ontario when intra-party democracy resulted in a clash between the parliamentary and mass sections of the party, and attempts to relate the implications of this study to the general question of the distribution of power in parties of extra-parliamentary origin.

The domination of the Legislative Assembly from 1919 to 1923 by an alliance of the United Farmers of Ontario and the Independent Labor party provided Ontario with its unique experience of “third-party” government. The suddenness of the intervention of these parties into the traditional order of Ontario's Conservative-Liberal politics was matched only by their equally rapid exit after less than four years of power. Standing as it did at the forefront of a wave of protesting third parties in the following two decades, the event is of considerable significance both for its contribution to a general understanding of the problems of third parties and for the opportunity it affords as a case study of farmer-labour co-operation. Although intra-party democracy was important for both members of the union, this paper deals with its effects on only one of the parties—the United Farmers.

In a recent paper, J. N. Wolfe has interpreted P. Sraffa as having exposed a logical inconsistency in Marshall's Principles of Economics. According to Wolfe, Sraffa interpreted Marshall as being concerned with perfect competition and yet as allowing his representative firm to possess unexhausted internal economies; he therefore believed that Marshall was inconsistent, for the two phenomena are incompatible. Wolfe himself interprets the Marshallian representative firm as an oligopoly model.

This note discusses the following points. First it will be shown that Marshall's model when discussing increasing returns and the representative firm involved neither perfect competition nor oligopoly but imperfect competition. Second, I shall argue that the representative firm was largely designed to describe the problems which exist when product differentiation is recognized but when the industry is retained as a meaningful concept. That is, Marshall faces the same difficulties as those faced by J. Robinson and E. Chamberlin, but his solution involves a different approach. This is not to suggest that there was no need for the Robinson and Chamberlin volumes; indeed their appearance, together with Sraffa's article, reflected the unsatisfactory state in which Marshall left his analysis on this topic. Third, it follows from our interpretation that for Marshall the representative firm was a structure of the mind, a tool of analysis, and not a real firm. To clarify his views, I reproduce certain passages from which it is clear that he is not guilty of logical inconsistency either in the case of actual firms, or in the case of the representative firm.