Review

It was years ago that Winston Churchill came to Westminster and warned his audience and the nation of an ominous threat to our peace and security by enemies from abroad. The course of world events in the intervening years has fully justified his concern. 

This article investigates the impact of the timing of reserve accounting on the conduct of monetary policy and on reserve management by individual banks. The author finds that changes in deposit liabilities have no effect in the current week on the reserve positions of banks that clear cheeks through accounts at correspondents. 

This article shows that (i) changes in the portion of retail food costs received by farmers largely result from farm product supply fluctuations that cause changes in the prices of farm commodities rather than from changes in the middleman’s share; (ii) changes in the middleman’s receipts (gross receipts less the costs of farm products) essentially result from inflation; (iii) changes in farm product prices and inflation are the two primary causes of changes in retail food prices; and (iv) retail food prices reflect farm product price changes only after a time lag and that the existence of this lag may account for much of the criticism of the middleman.