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The article focuses on the development of fiscal policy for monetary policy and the banking system. Fiscal policy could perhaps be regarded from the beginning as a substitute for central bank policy. The analysis of income-creating expenditures has been the chief preoccupation of fiscal theory. Since the first World War, revolutionary changes have occurred in American banking. The greatest change which has occurred in banking since the Reserve System was established has been in the growth of bank investments. This growth began in the first World War when the banks, with the aid of the new Reserve System, bought government securities for their own account and made loans to finance purchases by the public. As bank investments have increased, long-term interest rates have shown increased sensitivity to changes in bank reserves, and the emphasis in monetary theory has shifted to the need for controlling the long-term rates, as more effective for the control of investment, income, and employment than control merely of the short-term rates.

This article presents information on the Banking Act of 1935. Title II of the Banking Act of 1935 is the part which consists of the new amendments to the Federal Reserve Act. The violence of feeling was, quite out of proportion to the actual content of the proposed legislation. There was a disposition on both sides to regard the bill as more revolutionary than it really was. On the one hand, some of the more enthusiastic believers in quantitative monetary control as a means of achieving economic stability were inclined to regard this legislation as marking a complete break with the past behavior and the past philosophy of the reserve system. On the other hand, the critics were inclined to read into it fears that arose not so much from its actual content as from their own hostility to previous new deal legislation and experimentation, particularly in the monetary sphere.

The article presents a reprint from the "Commercial and Financial Chronicle." The article discusses the U.S. national debt and its impact on the economy, particularly the work of the federal government, and its impact on production, employment, income, credit volume, bank deposits, and other areas of American industry. The author presents two proposals, legislation creating non-marketable securities for bank ownership or payment of outstanding bank-held obligations with Federal Reserve credits.