by ROBERT TRIFFIN
THE popularity which central banking enjoyed in the twenties as a field of study and as a prospective panacea for business booms and depressions was put to a hard test by the great depression that ended the decade. The failure of monetary management to pass that test turned the attention of economists in other directions. Monopolistic competition and, later, saving-investment theories took the center of the stage.
The current discussions about international monetary stabilization and postwar lending are again bringing central banking out of oblivion. The time has come to review the monetary experiments of the interwar period and to learn from their failures as well as from their successes. Most urgent is a new inventory of the old arsenal of central-banking weapons for monetary control--discount rates, openmarket operations, etc.--with a view to determine whether it will suffice for the tasks ahead or whether it is in need of a bold rearmament policy.
The question, of course, does not lend itself to any general or uniform treatment. The nature of the essential monetary problems, the present level of development reached by national monetary institutions, and the availability or efficacy of various techniques of control are fundamentally different from country to country. A full understanding of these differences and of these national characteristics is an indispensable prerequisite to any intelligent approach toward