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

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Document type:: Monograph

Structure type:: Chapter

Title:: Part III. The recent historical example

Collection:: Economics Books

6 MONEY receipts, and now that the wicked banks have * put on the screw,” buyers are obliged to hold off, and they themselves, ‘though perfectly sound,” owing to the impossibility of getting sufficient accommoda- tion, have difficulty in carrying on their business on the scale to which it has risen. Pessimism succeeds optimism, and the upward slope of prices in which the predominant desire is to spend money on goods and services, is succeeded by a downward slope in which the predominant desire is to sell goods for money. In a war the situation is different. It is then not private persons and institutions, but the government which starts the rise of prices by profuse undertakings to buy goods and services without much thought of how the expense is to be met. When the bills begin to come in, the revenue, augmented as yet, if at all, only by small additions, is quite inadequate to meet the additional payments. A private person or institution without realizable capital in analogous circumstances is obliged either to borrow, even if the terms be what he calls “ ruinous,” or to go into bankruptcy. Bankruptcy in such circumstances is clearly of no use to a government: a government has to continue in business. A government which appeared secure and was expected by its subjects to win the war, could probably always borrow as much as was needed, if it were willing to pay the necessary price, which would be a very high rate of interest at first, but one which could be reduced by reborrow- ing at lower rates after the war. Governments, however, are afraid to offer good enough terms. They think it will encourage the enemy if they have to pay even only double what they had to pay for loans in time of peace. The “ business community,” or so much of it as borrows from banks, terrifies it with stories that if it gives high interest the rates

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