Thanks to Roger Sandilands for the material from Currie. We owe a lot to Currie for his earlier article on "The Decline of the Commercial Loan". There he showed that the merger movement, and the growth of self-financing by corporations, shrank the demand for commercial loans from banks and forced them into the dangerous mortgage market. How he segued from that into his campaign against what he termed the "real bills" doctrine remains hard for me to comprehend. Roger, a deep student of Currie, is the man to explain it, and I would welcome his analysis. Some points are: 1. The fact that dd's did not rise greatly after 1925 does not belie the fact that their dependence on real estate collateral rose greatly, since commercial loans, by Currie, were declining. 2. My initial posting did not, as implied, specify deposit expansion after 1925. It would include a longer period, including W.W. I. The national debt rose then, and then fell during the 1920's, as Andrew Mellon sought to pay it down. For this and its "reverse crowding-out" effect I grudgingly give him credit, but did he foresee that driving investors into the private sector could be asset-price-inflating, and not just asset-creating? This loss of government securities, at any rate, may have been another factor forcing banks to seek other investments, including shoestring financing to land developers and speculators. 3. How did Currie define the "real-bills" doctrine? As Lloyd Mints documented so exhaustively (and tiresomely) it has been an epithet of multiple meanings. So when Currie used it as a club to beat certain Fed Directors I began to wonder if it were to him an analytical scalpel or an oratorical bludgeon? I know my good friend Roger, whom I esteem highly, in turn esteems Currie highly, and will explain Currie's position ably and sympathetically. (It takes one Scot fully to understand another?) 4. Currie came under extreme pressure from various red-baiters who eventually drove him into exile from the U.S. Whatever their motives and whatever of his positions offended them, I do not know, although I am sure Roger can enlighten us. The relevance here is that this political factor affected and twisted the reception of his ideas in academia, and should be taken into account. 5. When I wrote above that Roger is the "man" to explain it, it was not a slip. It was to signalize the fact that almost all participants in this discussion are male. I find that distressing, but that is not the point here. The point is that something drives the females away from our dialogue, and it might be helpful to understand why. 6. When loans are repaid but not renewed, or replaced with new loans, the effect is as though the banks simply swallowed up the money. To interpret this as hoarding or oversaving or a leakage from the circular flow of income is to blot out the role of deposit contraction, and looks to me like a major oversight. Mason Gaffney