101Z. Bobbie Johnstone to Harrod, 26 March, 1927 [a]

Johnstone enjoyed reading Harrod's review of Leaf in the Economic Journal, [1] and sends some comments. He defends the view --`not dissimilar from Harrod's'-- that the capacity of the Joint Stock to expand credit is strictly limited, and insists on the fact --already stressed by Harrod-- that every loan creates deposits. [2]

1. a. From Small Hythe, Tenderdent, Kent # , ALS, 2 pages, with 4 pages AN date 1 April, 1927, in HPBL Add 71190/19-21.

1. 1. R. F. Harrod, "[Review of] Banking, by Walter Leaf", Economic Journal 1927, March, pp. 76-81.

   2. Harrod later discussed the relationship between bank lending and deposits in correspondence with Cannan in November 1933 (see letter 334 ) and with Robertson and Keynes in October 1935 (letters 480 and 481 ).

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