Journal Article Recent Progress of Profit-sharing Abroad Get access David Kinley David Kinley Johns Hopkins University Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 5, Issue 4, July 1891, Pages 497–503, https://doi.org/10.2307/1879363 Published: 01 July 1891

IN this JOURNAL for March I895 the writer of the present article presented some results of an inquiry made by the comptroller of the currency,' concerning the proportion of credit-paper used in retail payments. An attempt was made to formulate a relation between population and proportion of credit-paper used. The data were so meager that the attempt seemed over-bold, and the conclusions but slenderly supported. Two years later a second set of data was secured, much more voluminous and more representative of the habits of the people in the use of credit-paper. Although the new data seemed to support the previous conclusions, they could in no sense be regarded as proving them, and it was a question whether it was worth while to present the new evidence. Further reflection, however, strengthens the writer's belief in the probable correctness of his first conclusions. This, together with the importance of the subject, must serve as his excuse for taking up the matter anew. The data obtained for these reports contained, among other things, a statement of the amount of deposits made in the banks which replied, on a selected day, together with the amount of these deposits made in the form of credit-paper.' The returns dealt separately with the returns of retail traders, wholesale traders, and "all others." The primary purpose of getting the data was to determine the extent to which creditpaper was used in payments. Obviously, if there is a definite relation between increasing population and the quantity of credit-paper it uses, a definite line could be drawn to represent this relation, using the population numbers as points on the axis of abscissas and the corresponding amiounts, or proportions, of credit-paper to indicate the values of the corresponding ordinates. Is it possible to use the data secured so as to show this, even in the roughest way? To get a true curve of such a relationship, if it exists, there are certain conditions necessary, whose importance is emphasized, if one may say so, by their absence from the statistics at hand. The

data on which this paper is based consist of replies received from 2465 national banks to questions suggested by myself and sent out by the Comptroller of the Currency.The blanks sent out called for the amounts deposited in the banks, on the settling day nearest to the thirtieth of June, by retail grocers, butchers, clothiers, furniture dealers and fuel dealers.The banks were requested to specify the amount of each of the different kinds of money and the amount of checks and other instruments of credit in each deposit.Information was asked for also as to the usual period of credit in retail trade, the extent to which wages are paid by checks and the extent to which employees get their pay-checks cashed by merchants.The primary purpose of the investigation was to secure some data respecting the percentage of credit instruments used in retail payments.Previous investigations into the use of credit instruments included all transactions, and it has been pretty generally agreed that the large percentage of instruments of credit shown by these investigations was mainly due to the magnitude of wholesale trade.For both practical and theoretical reasons it is desirable to have some data on the use of such instruments by the great mass of the people in their ordinary purchases.The five classes of retail dealers selected were chosen because their businesses are the ones the purchase of whose products represents the principal parts of the expenses of living of the people at large.The Commissioner of Labor in his reports for i890 and i89i on the cost of production of certain commodities, gives comparative data respecting the cost of living.According to his figures, the expenditure for food, clothing, furniture and fuel is ordinarily about 67 per cent., or two-thirds of the total expenditure of each individual for all classes of incomes.It is nearer 70 per cent. of that of those with incomes below 9.3 25.0 65.7 2.50 43.56.Ky .. 4