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 II. The explanation of contemporary monetary phenomena and currency theory

Collection:: Economics Books

178 MODERN MONETARY SYSTEMS silver écus, which were the only monetary instruments in the Spanish circulation to have a market value ! And so, with any monetary system which includes an available metal circulation, we are accustomed to consider as the basis of the system or the standard that currency which gives to the entire monetary system a stable basis for its monetary relations with foreign countries. This currency is usually of metal, i.e., gold. Therefore, in practice, we are right in considering gold as the basis of the system. But in fact gold only plays this part because, being accepted for free coinage in a large number of countries, a given weight corresponds in each of these countries to a given number of monetary units and because its international circulation makes it possible for one national monetary unit to be converted into another at a fairly constant rate. Therefore this does not mean that the value of these various national units of account, which are only connected with each other by the fact of their being convertible into gold, is determined by gold, and gold is the standard because it is a commodity; and so the above remarks can be easily reconciled with the conclusions which we have reached earlier; and we may deduce from them that an international fiduciary currency such as notes, which have currency in several countries, would constitute, as between those countries and without any support from metal, an 1 This idea has, of course, been known for a long time. It was brought out in particular by Cernuschi in “La monnaie métallique.” It has usually been rejected. M. Bourguin, in his work already quoted on “La mesure de la valeur et la monnaie,” stated that he could not understand how notes issued in the form of abstract monetary units could fail to be connected with a definite quantity of commodities. Without disputing that there is a real truth in M. Bourguin’s remarks, it does not seem to us that the problem has been quite accurately stated. It is true in our opinion that the monetary unit was originally connected with a certain quantity of a commodity; and it would be a curious proceeding to issue notes in a new monetary unit unconnected with previous units; but we believe that an analysis of the notion of a standard and of the part played nowadays by precious metals in determining the value of monetary units shows logically that the value of such units which was originally determined by the exchange of precious metal as a commodity and in some sort established on this historic basis, has continued to develop under the system of free

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