Modern monetary systems

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Monograph

Identifikator:: 1753210836

URN:: urn:nbn:de:zbw-retromon-128414

Document type:: Monograph

Author:: Nogaro, Bertrand http://d-nb.info/gnd/117039713

Title:: Modern monetary systems

Place of publication:: London

Publisher:: King

Year of publication:: 1927

Scope:: XII, 236 S.

Digitisation:: 2021

Collection:: Economics Books

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Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Part III. Monetary theory and its application in practice

Collection:: Economics Books

TO DISCOVER A STABLE STANDARD 191 rise in the rate of interest, whereas revenues increase more nearly in proportion to the rise in prices. But the tables may be turned when the public debt is practically wiped out by the unlimited depreciation of the currency and the Budget no longer contains any expendi- ture except in respect of staff and material, items which increase in direct proportion to the depreciation, whereas the returns from taxation lag behind the movement of prices. As depreciation progresses and is accelerated, efforts are multiplied to counteract its effects continually and automatically in all relations between creditors and debtors; scales of salary are set up which vary auto- matically with the cost of living (internal purchasing power of currency) or with the value of gold. Most commercial and industrial transactions are based on gold— In practice, on some foreign currency. As shown above, gold loans are issued and taxes are collected in gold by the same method.! This procedure approaches as nearly as possible to the logical system of neutralising variations in purchasing power of currency by applying coefficients pro- portionate to such changes and also varying according to the date at which payment is effected. But even apart from the enormous accounting difficulties implied by such a sys- tem, it hardly seems possible to apply it uniformly. Changes in purchasing power are sometimes so rapid and so great that even with scales of salaries which vary every fortnight or every week, a workman cannot know for certain what quantity of goods he will be able to purchase from one day to another with the sum of money which is supposed to support him until his next pay ‘day. Still worse, a peasant who has sold his products on the market, what- ever immediate profit he may have realised, does not know ! See the preceding account of the collection of taxes in Germany. The same method was introduced in a more elaborate form in Poland, where the “zloty” was introduced as a unit for measuring and assessing taxes; the zloty was supposed to represent the purchasing power of the amount of gold contained in a zloty as published officially in the index of wholesale prices; this purchasing power is that of 1914 multiplied by a coefficient corresponding to the index.

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