chapter  XXIV
7 Pages

Do. -THE ELASTICITY OF SUPPLY

I F the banks are to take effective action to control the value of the sovereign, it is essential that the currency which they supply should be capable of being readily expanded and contracted, and that the power to effect these changes-in its volume should

rest mainly in their own hands. The first questions to be considered, then, are the elasticity of the cheque currency and the points at which this elasticity is controlled.