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 I. Modern monetary systems and their operation

Collection:: Economics Books

16 MODERN MONETARY SYSTEMS hand, the system of free coinage as applied to both metals seemed likely to put each into free circulation and allow the value of each to be freely determined without the slightest interference by public authorities ; on the other, it might be inferred from the fixing of a legal ratio that the law had at least power to determine the value of one metal with regard to the other—a supposition which runs counter to a doctrine based on centuries of experience. Neverthe- less, bimetallism was adopted in a great many European and American countries and holds a predominant place in the monetary history of the first three quarters of the 19th century. But it should not be forgotten that it was set up in France empirically and with the idea that the legal ratio would have to be altered according to fluctuations in the commercial value of the two metals. Hence considerable variations were expected to occur in the ratio between the two metals, as a result of a rise or fall in the stocks of metals and thus of vicissitudes in their production. Now with regard to the 70 years which elapsed between the year XI and 1873, the striking fact is not that fluctuations should have occurred, but that they should have been so slight and that the exchange ratio be- tween the two metals should have been so nearly constant. This is a phenomenon which calls for the attention of economists and gives rise to some mistrust of the principles which guided the originators of our monetary system. § 2. Bimetallism in operation during the first three quarters of the 19th century. Explanation of the slight fluctuations in the price of silver in monometallist countries. In the first place, let us rehearse the facts. Throughout the whole of this period the legal rates between gold and Desrotours, a man of practical experience in monetary affairs, declared that such fixing is possible internally, but he admitted that owing to the necessity of transactions with foreign countries a constant ratio could not be maintained; this was true at a time when the legal ratios often varied considerably as between different countries. Even in the 14th century the notions behind the classical theory are to be found in the works of Nicole Oresme. (See M. Bridrey’s scholarly work, “La théorie de la monnaie au XIVeme siécle,” Nicole Oresme, Giard et Bridre, Paris, 1906.)

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