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The Federal Reserve Amendments of 1917: The Beginning of a Seasonal Note Issue Policy

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  • Fishe, Raymond P H

Abstract

The Federal Reserve adopted a policy of smoothing the seasonal behavior of interest rates after the amendments of 1917. These amendments reduced the "collateral" requirements for notes issued and thereby increased note issue capability. Notes in circulation more than doubled from June to December 1917. These amendments were passed to assist with war-related financing as their timing coincided with the entry of the United States into World War I. The smoothing of interest rates seasonals between 1914 and 1917 was not due to the founding of the Federal Reserve System, but rather to trade-related gold flows. Copyright 1991 by Ohio State University Press.

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  • Fishe, Raymond P H, 1991. "The Federal Reserve Amendments of 1917: The Beginning of a Seasonal Note Issue Policy," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 23(3), pages 308-326, August.
    • Handle: RePEc:mcb:jmoncb:v:23:y:1991:i:3:p:308-26
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    Cited by:

    1. Santos, Joseph, 2003. "Commodity futures contracts: Furnishing an elastic currency in the nineteenth century," Journal of Macroeconomics, Elsevier, vol. 25(4), pages 561-578, December.
    2. Gary Gorton & Andrew Metrick, 2013. "The Federal Reserve and Panic Prevention: The Roles of Financial Regulation and Lender of Last Resort," Journal of Economic Perspectives, American Economic Association, vol. 27(4), pages 45-64, Fall.
    3. Glenn L. Furton & Alexander William Salter, 2017. "Money and the rule of law," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 30(4), pages 517-532, December.
    4. Choi, Seungmook & Wohar, Mark E., 1995. "The expectations theory of interest rates: Cointegration and factor decomposition," International Journal of Forecasting, Elsevier, vol. 11(2), pages 253-262, June.
    5. Gary B. Gorton & Andrew Metrick, 2013. "The Federal Reserve and Financial Regulation: The First Hundred Years," NBER Working Papers 19292, National Bureau of Economic Research, Inc.
    6. Caporale, Tony, 2015. "Regime changes and interest rate risk," Economics Letters, Elsevier, vol. 136(C), pages 204-206.

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