chapter  4
9 Pages

The March 1933 Chicago Memorandum

The idea that government backing of the currency was fundamental to its acceptance at par value in exchange was a well accepted principle in American monetary history. In the wake of the collapse in the early 1930s, it is not surprising that the principle would be recommended as a remedy. In 1926 Frederick Soddy had made a proposal to back bank liabilities with government cash. Others, including prominent economists, supported this idea.