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

Usage license:: Get license information via the feedback formular.

Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Part I. Modern monetary systems and their operation

Collection:: Economics Books

THE MONETARY CRISIS 51 To these causes of monetary instability and dislocation of the exchanges was added yet another when, at the beginning of 1916, silver began to appreciate rapidly. For countries with a silver currency which had adopted the gold exchange standard had fixed the new parity at a point which was not far from the rate of exchange ruling at the time when their monetary reform took place ; if silver was exported their exchange was liable to rise above the gold point corresponding to the official rate and as high as the silver point corresponding to the market price of silver. Even British India, in spite of having stabilised the rupee at the fairly high rate of 16 pence, was affected by this unexpected event. For not only was silver ex- ported in spite of prohibitions, but in order to make necessary payments in India and meet internal currency needs in a country which, as is well known, had an enormous capacity for absorption, silver had to be bought at a much higher rate than 164. The difference between the purchase price and the legal parity was due both to the appreciation of white metal on the American market and the depreciation of sterling in relation to the dollar. After trying various palliatives, the Government of India decided to alter the official parity of the rupee, and finally, under the Act of September 8th, 1920, fixed it at two shillings to the rupee or ten rupees to the pound, a rate equivalent to a ratio of 1: 15 between gold and silver. Such are the circumstances, briefly summarised, in which there arose and developed a world-wide monetary crisis from which we have not yet emerged. For even between a few countries such as the United States and Japan a mutually stable exchange on a par basis has only just been re-established. After this short summary, we shall have to examine successively the exchange policy pursued during the war ; observation, which will show that, if a common basis can be given to several national monetary systems, this is not only due to their respective monetary units representing a given weight of metal, 7.c., a certain quantity of the commodity, but also because under the system of free coinage the passage of gold from one country to another allows one monetary unit to be converted into another at a fixed rate.

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