A SUGGESTED PROGRAM OF STUDY OF A STATE TAX SYSTEM

ing government bonds in order to increase their reserves. If opportunities for loans to business become sufficiently abundant and profitable, relatively high rates on government securities would probably not prevent banks from selling their government bonds in order to obtain reserves necessary to make the private loans. Reserve requirements are already near the legal maximum, while open market operations on a scale necessary to halt such a movement would be inexpedient. Third, taxes should remain high, both on selected consumption items and upon income. Fourth, governm nt expenditure should be cut as much as is consistent with America's international responsibilities, and efforts should be made to reduce the bank-held debt. To the extent that these policies might be successful in preventing further inflation, monetization of redeemable bonds and increased velocity of current balances would be held to a minimum. Widespread anticipations of future price decreases on the one hand and of increased output on the other appear to have resulted in a degree of buyers' resistance, which probably indicates that inflation has reached its peak.