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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Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Part III. The recent historical example

Collection:: Economics Books

+08 MONEY Advances from Government Departments, and few persons suspected that the Currency Note Account was the largest holder of Treasury Bills and the largest Advancer among Government Departments. Ques- tions intended to bring out the facts were always smothered by Ministers in the House of Commons, and the uninstructed public imagined that the reduc- tion of the aggregate currency by some fifteen per cent. was due to the fall of prices, just as they had supposed that the increase of currency from 1915 to 1919 was due to the rise of prices. This doubtless made it somewhat easier to carry out the policy, but it was unfortunate in that it prevented foreign coun- tries from understanding what was done, and thus deprived them of what ought to have been a useful example. By the end of the three years the work of restoring the pound to the old parity with gold was nearly done. In March, 1920, the paper pound was only worth about 70 per cent. of the gold contents of a sovereign : in March, 1923, it was worth over 96 per cent.—four months more at that rate of progress should have brought it to par. But as often happens in monetary history, the cup was allowed to slip from the lip. The policy of reducing the paper currency was abandoned in favour of keeping it stationary (except of course for the seasonal and other temporary variations). It is as yet unknown whether this was due to a change of personnel which had taken place at the Treasury, to ministerial fears of unpopularity, to timidity on the part of high financial authorities about the return to the gold standard, or to a belief that gold and the paper pound would now approxi- mate in value without any further reduction of the paper currency. Anyhow this belief turned out to be correct, though two more years were required for the process ; after a shocking 8 per cent. relapse in the

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