HERE is offered an investigation of the relations between government financing, the banking system and business--a judicious and impartial survey of the various dangers and benefits which may arise from the unbalanced budget.

The opening chapters give a complete and detailed study of the technique of handling Treasury funds, with special emphasis on the significance to the banks of alternative methods, and on the influence of government activities upon bank reserves and lending capacity. A survey of war finance follows, and this chapter lays the groundwork for the consideration of depression finance which occupies the last four chapters of the book.

This latter study presents an analysis of the possible effects of unbalanced budgets during a depression; an examination of both the theoretical and popular arguments for and against government emergency expenditures; the effect of government spending on private industrial spending; the relation of such expenditures to bank loans, and finally the probable position of the banking system, with its large holdings of Treasury obligations, under conditions of recovery. The author feels that the process of funding and paying off the debt will raise some entirely new banking problems, which are here presented for the first time.

The study of these questions, of which this book is the result, was started some years ago as a purely theoretical investigation, before the Treasury deficit became a matter of immediate and universal concern. This longer period of time has permitted the author to give due consideration to the entire field, without being overwhelmed by the urgency of any immediate problem; an unbiased treatment of the subject is accordingly assured.