Date of Award

6-1925

Degree Type

Bachelors Essay

Degree Name

Bachelor of Science (BS)

Department

Business Administration

First Advisor

Paul E. Miller

Second Advisor

Fred D. Merrill

Abstract

The rapid rise of industrial activity in the United States has led to the need of a sound credit structure in order to maintain and help business which has taken great leaps and bounds in the direction of consolidation of small interests. Business is now done on such a large scale that it is impossible to proceed without the assistance of outside financial aid, both for permanent capital and funds needed only in times of greater activity than the permanent investment can withstand. The ability to get this advancement of short time funds shows the credit which a concern has. Upon this E. E. Lincoln says, "Credit is not capital; it merely facilitates the use of capital." But capital, and the way in which this fixed investment has been distributed throughout the business is the basis upon which is determined the amount of credit which can be extended to the concern. Loans and discounts then have as their basis the credit expansion which an individual, a firm, community, a state or a government can meet, but often times this limit is exceeded, causing panics and depressions.

This is one of the reasons for the establishing of the Federal Reserve System which is hoped will serve as a check upon conditions of this kind and has proved successful during the short time in which it has been in operation.

Comments

A Thesis Submitted to Fulfill the Requirements for The Degree of Bachelor of Science in Commerce, Milwaukee, Wisconsin.

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