Money

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Monograph

Identifikator:: 1819853969

URN:: urn:nbn:de:zbw-retromon-207464

Document type:: Monograph

Author:: Cannan, Edwin http://d-nb.info/gnd/118666916

Title:: Money

Edition:: 6. ed.

Place of publication:: [London]

Publisher:: King

Year of publication:: 1929

Scope:: XII, 120 Seiten

Digitisation:: 2022

Collection:: Economics Books

Usage license:: Get license information via the feedback formular.

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Document type:: Monograph

Structure type:: Chapter

Title:: Part III. The recent historical example

Collection:: Economics Books

D4 MONEY analogous circumstances. There is, too, no mystery about the method by which the government can get possession of most of the gold in the country. With the proceeds of taxes and loans it can buy up all that is not current coin, and the current coin can be extracted from the pockets and tills of the people by printing a convenient paper legal-tender substitute and making all payments in it, while retaining all coin received. The coin which is in the cellars of banks can be commandeered, and the new paper given in exchange for it without causing any financial crisis or disturbance. This can be done without issuing more of the new currency than there existed of the old, and conse- quently the change from a gold to a paper unit of account—say from a gold pound or sovereign to a paper pound or Bradbury—need not involve any depreciation against either gold or commodities and services in general. But the European belligerents in the late War, without a single exception, issued or allowed and encouraged their banks to issue a great deal more paper legal-tender than this. It is well to understand exactly how and why this came about. Sometimes when peace is profound and currencies are perfectly healthy, something starts a general wave of optimism which makes large numbers of people buy and promise to buy more goods and services than usual under the impression that ““ busi- ness is likely to be good ”’; in other words, that they will be able to sell more without reduction and perhaps with an increase of price. There is a “ boom,” and the ““ producers ” (it would be more accurate to say the community thinking of itself as a seller) feel very prosperous. Soon, however, it is recognized that selling much at “good *’ prices is accompanied by having to buy at prices which are only “good ” to the seller but are “shocking ” to the buyer, while

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