VALUE OF NOTES 
by 
"“ price,” the value required for gold sometimes is and 
sometimes is not called its * price,” and the value 
required for notes is never in ordinary language called 
their price. 
The feeble reply of the apologists to some such 
criticism as this is that in fact the rise of prices 
and wages comes first. This would be perfectly 
immaterial if it were true, which it probably is not. 
If it were true, it would only mean that the increase 
of the note-issue was anticipated. When a Govern- 
ment has issued an additional £2,000,000 a week for 
months together, it is not unlikely that all business 
will be done on the assumption that this will continue. 
People may consciously or unconsciously expect a 
fall in the value of notes (¢ rise in general prices) 
just as well as they expect a rise in cral or jam. 
When issuers have once adonted the absurd maxim 
"“ Higher prices: issue mors notez, their country 
finds itself in what nuzzlr- -.lcs rall a * vicious 
circle ’—notes are increas: "7 rise, notes must 
be further increased to ‘““ ca = -ise,”” prices rise 
still further, and notes must .. further increased 
and so on. .d infinitum” NO certain’v: there is 
always an end to it. Often the real or fancied 
emergency which led to the suspension of convert- 
ibility disappears before the process of bringing 
down the value of the notes has gone too far for 
recovery, and with the disappearance of the emer- 
gency much of the bias in favour of that course is 
lost, and a return is made, perhaps slowly (as in 
America after the Civil War), perhaps painfully (as in 
England after the Napoleonic War), to a bullion 
standard. Two greatinjustices have been committed: 
the first to those persons and classes who suffered by 
the fall in the value of money, nd thzsecond to those 
who suffered by its subsequent rise. The two do not 
cancel each other, since those who gain by the second 
1)