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 III. Monetary theory and its application in practice

Collection:: Economics Books

192 MODERN MONETARY SYSTEMS what he will be able to obtain in exchange if he does not immediately spend the entire sum he has received. And so all security in transactions and all possibility of saving disappear unless a coefficient of depreciation is applied daily and all sums received can be deposited at once with power to withdraw, not the sum deposited, but a sum which on the day of withdrawal will be equivalent to it after applying a coefficient.! It is easy to see how difficult it is to push this system to its logical conclusion and to what economic disturbances a country will be exposed if it adopts this procedure. Hence it is explicable that parliaments and law courts will as far as possible use their influence against any legal provision which is likely to involve the contracting parties in this kind of mechanism. Thus the French law of February 12th, 1916, which asserted the principle of forced currency, prohibited discrimination between fidu- ciary and metal currency, and French courts tend to pro- hibit obligations figuring in gold francs for internal transactions, even if they do not involve actual payment in coin.? 1 We have seen above how, particularly in Germany, stable accounts were opened in gold accounting units, but that this did not satisfactorily solve the problem so long as the mark was not stabilised externally. 2 Tt is obvious that if a contract stipulates for payment in gold francs, even if the actual payment is met in paper francs, the necessary result is to create, even in internal transactions, a difference between paper francs and gold francs, and to provoke in favour of the latter an internal agio which it was intended to prohibit under the law of 1916. The courts have usually been right in regarding this as a matter of public welfare and it is evident that private individuals, in their attempt to avoid the effects of a depreciation in the national currency by provisions of this kind, will only hasten that depreciation. French courts have, however, been somewhat hesitating in the matter, particularly in cases in which the clause “payable in gold” is previous to forced currency and also in cases in which it refers to long-term contracts (leases), for which we have seen that there is a more accurate and more logical solution. Finally, it does not always distinguish with sufficient clearness between international and internal transactions. In the latter case, the stipulation to pay in some appreciated foreign currency is generally inserted for the same reasons and has the same effect as the stipulation to pay in gold francs. In our opinion, it is therefore erroneous to argue in favour of this clause by

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