Money

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Monograph

Identifikator:: 1819853969

URN:: urn:nbn:de:zbw-retromon-207464

Document type:: Monograph

Author:: Cannan, Edwin http://d-nb.info/gnd/118666916

Title:: Money

Edition:: 6. ed.

Place of publication:: [London]

Publisher:: King

Year of publication:: 1929

Scope:: XII, 120 Seiten

Digitisation:: 2022

Collection:: Economics Books

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Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Part I. General principles

Collection:: Economics Books

VALUE OF NOTES 4C that it would be a fine thing to encourage people to take his notes by offering them at a small discount, but after breakfast he will remember that this would cause an enormous demand for his notes, but that they would all be immediately presented for redemp- tion so that more might be asked for and he would be ruined by the discount. There is, in fact, no possibility of the convertible note being below the value of the coin which it promises, and therefore it cannot drag the value of money—the unit of account of money—below the value of the bullion contents of the coin, when that coin itself is protected by free convertibility into bullion from being so dragged down. If the freedom of owners to do what they liked with sovereigns which prevailed in England before the War had been maintained, the introduction of an issue of convertible one-pound notes (formerly forbidden) with only an ordinary reserve against them, would doubtless have tended to drag down the value of English money, i.e. of £1 and all multiples and fractions of £1, and therefore to raise prices. But it would only have brought the value of the pound down along with gold throughout the world and only have raised English prices along with prices in the world at large. And a depression thus caused, though widespread, would be of trifling depth. An inconvertible issue has more power than a convertible of depressing the value of the unit of account and raising prices within the country where that unit is employed. Inconvertible notes may circulate at the full value of the bullion contents of the coin indicated on their face and even at the full value of the coin when it is restricted so as tc be worth more than its bullion contents. The lestimony «{ history is conclusive on this, and the {a.l is easily explained by the ordinary principle of demand conp'rd with adequate limitation

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