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

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 REIGN OF BIMETALLISM I between currencies of various metals. This conclusion was so obvious that the law was forced to take it into account. In England the difficulty was overcome, as is well known, by monometallism. The system of free coinage was applied only to gold. Silver was still bought by the Government and minted only in such quantities as were considered necessary for petty cash transactions; it was scaled in terms of gold, but was only legal tender to small amounts. Then silver, being reduced to the level of copper, acted merely as a substitute for gold, and was only used for minor transactions. As gold was alone held to be in free circulation, it was considered the true money in that it served as the standard measure in business transactions; it was the only standard metal. The reformers of the French Revolution adopted the same principles but applied them differently. They ad- mitted both metals to free coinage. They then took as a basis for their new monetary system the silver franc, which corresponded almost exactly to the livre of the time. As they thought themselves unable to establish a fixed ratio between the gold coin and silver, they decided in the first instance to use the former as mere “commercial tokens,” bearing a statement of weight and fineness, but without acquiring a definite exchange value in relation to silver coin either in virtue of their denomination or of any legal exchange ratio. It was only urgent practical necessity that overcame these theoretical scruples and induced the Legislature in the year XI to fix a legal exchange ratio between the two metals and to state on the gold coin an amount in francs corre- sponding to this ratio. A régime resulted under which both metals were accepted for free coinage and at the same time a fixed exchange ratio was established between them, i.e., a bimetallist system. At first it was considered illogical and contradictory,! even by its originators. On the one 1 The first report of the “Comité des Monnaies” in 1790, quoting Locke and Newton as authorities, states that there is “a physical impossibility and a perpetual contradiction between the facts and any law which attempts to fix once for all the price of metals used for minting them.” Nevertheless

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