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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Document type:: Monograph

Structure type:: Chapter

Title:: Part III. Monetary theory and its application in practice

Collection:: Economics Books

TO DISCOVER A STABLE STANDARD 193 On the other hand, it would be impossible, in the absence of any express legal provision, to consider as illegal any clause under which a payment at a given date was fixed in relation to changes in the average price level and therefore in the purchasing power of the currency. When applied to a long-term contract between private individuals a provision of this kind justly takes into account events which cannot be foreseen and it could ultimately only promote the conclusion of such contracts. But apart from the fact that the stipulation to pay in gold units is not completely adequate to the case, since it in fact relates such payments to the rate of exchange with countries on gold currencies, whereas the real risk which it is desired to avoid is the change in the internal purchas- ing power of the currency, it has the serious disadvantage of encouraging an agio on gold in internal transactions, and so runs the risk of accelerating internal depreciation by linking it up with the loss on exchange. The habit of the commercial world in countries with highly depreci- ated currencies, such as Austria, Poland and Germany, of keeping their accounts and subsequently of fixing their prices according to the rate of the dollar, was indeed a result of the depreciation which had already taken place. But it also contributed largely to increasing this depreci- ation by inducing changes in the price of a large number even of non-imported commodities, which immediately followed all the exchange movements due to the fancies and panics of international speculation. Finally, the habit of keeping accounts in a foreign currency must necessarily give further encouragement to private individuals to obtain that currency in order to preserve their savings; the quite unusual demand for media of payment abroad which results [from this practice creates an irremediable deficit in the trade balance and so drags the exchange and the internal depreciation into a vicious circle. Hence it seems that apart from coefficients of variations reference to Article 143 of the Code de Commerce, at any rate since the law of February 12th, 1916, has prohibited discrimination between gold currency and the national fiduciary currency. ( )

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