ABSTRACT
EXPANSIONS of money income, which are the dominant characteristic of monetary booms, can only, except in very peculiar circumstances, be started and developed if the controllers of industry - in war principally the Government, in peace business leaders - have a keen desire to use - not to hold - purchasing power. In times of peace, with which alone we are here concerned, that desire is generated and developed by expectations of good money returns, no matter whether these expectations are well or ill founded. Unless such expectations exist, or can be created, mere readiness on the part of banks to provide money, even to provide it at very cheap rates, cannot, as our experience in the early 'thirties has shown, bring a boom to birth. Nobody wants to borrow money for use unless he can see ways of using it to get a good retUrn; and, if money is forced upon him, say, by the purchase from him of securities, he will simply hold it as an idle savings deposit in his bank: or, if we prefer other language, an increase in the quantity of bank money will be offset by a corresponding decrease in its income velocity.
