Modern monetary systems

Bibliographic data

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 II. The explanation of contemporary monetary phenomena and currency theory

Collection:: Economics Books

170 MODERN MONETARY SYSTEMS weight of fine metal had received a definite denomination which was often traditional, have adopted the principle of maintaining a single scale. Thus, with a system of free coinage, the purchase price of metal was repaid by the sum of money of account of the number of coins contained in the bullion, save that in certain countries a very small sum which was known in advance was deducted to cover the expenses of minting. Lastly, the legal French ratio of 1—1 §3 between gold and silver was very widely adopted.! It is true that the free coinage of both metals has given rise to alternating leakages of gold and silver in bimetallist countries owing to action taken in monometallist coun- tries. But we have seen that the difference between the “commercial” value of the two metals and their legal ratio has been small and is due to the various costs arising from the transformation of bullion into coin and wice versa.” Circumstances have changed; this can and should justify a corresponding change in our ideas. The point is whether, in adopting the system of free coinage, legislators who believed that they were keeping in the background did not in fact influence the value of the metal or metals which they included in this system. It will be easily recognised that this system, by making the metal convertible into coin ad libitum, whereas in 1 At least approximately similar rates have been adopted except in the United States where in 1834 a change was made from the ratio I-15 to 1-16. 2In his interesting and profound studies of monetary problems (“Eléments d’Economie politique, La circulation”), M. Houques-Four- cade, Professor at the University of Toulouse, after having described the numerous measures taken in Europe and in the United States during the 19th century to keep the monetary systems working, comes to the con- clusion that the bimetallist system is unstable (p. 249). We admit that we cannot agree with this conclusion: first, because the author in describing the relative difficulties in the use of silver goes far beyond the time at which bimetallism came to an end and thus attributes to this system difficulties which in fact arose from its disappearance; secondly, because the difficulties of the period of bimetallism are in no way due to the impossi- bility of maintaining a stable exchange ratio between two metals, both being equally protected from the influence of supply and demand (as they have the advantages of an unlimited market and a fixed rate), but merely from the unhappy position of bimetallist countries which are caught between gold-standard and silver-standard countries.

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