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

36 MODERN MONETARY SYSTEMS In other words, a new monetary system was set up in this way which included a silver currency, to some extent fiduciary in character, and had the advantage of the gold standard for foreign payments. This is the system which the Americans have called the “gold exchange standard” and which we may describe as the “System of the Gold Reserve! Thanks to the gold reserve thus constituted and to the fact that the Indian Government issued drafts upon it at the same rate at which it was prepared to exchange pounds sterling for rupees, the value of the rupee could hence- forward (from 1900 onwards) be stabilised at 16 pence, even at times, as, for instance, between 1907 and 1908 and again in 1914, when the trade balance of India showed a large deficit. We thus observe the curious fact that the stabilisation of the rupee was carried out at the very time when the Government was abandoning its policy of monetary con- traction and, having resigned itself to a resumption of the coinage of rupees, was issuing annually between 100 and 200 million new rupees, not counting those put back into circulation in exchange for gold imported from abroad. The significance of the monetary reform thus carried out in India is obvious, and gives rise to the following practical conclusions, the theory of which is reserved for a later chapter. It is possible to stabilise an internal silver currency in relation to gold at an arbitrary rate superior to the market value of the metal contained in the coin, by giving it a semi-fiduciary character, if the following measures are adopted : (1) The suppression, not indeed of all minting—for the Government 1s bound to maintain a currency adequate to 1 This system, set up by the Indian Government as an experiment and in self-defence, realised on the whole Mr. Lindsay’s project, which had been considered Utopian (see Kemmerer, “Modern Currency Reforms”). The law of 1898, under which a gold reserve had been constituted in London, was originally a provisional measure of secondary importance, but it was prolonged in 19oc and its main clauses became permanent from 1902 onwards.

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