Money

Bibliographic data

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.

Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Part I. General principles

Collection:: Economics Books

(2 MONEY done, the promises or “ notes’ pass from hand to hand easily, become generally acceptable, are *“ paper currency.” There is a demand for them because they are more convenient for keeping and paying large sums than gold, and still more than silver. They can be more easily stored and carried : each one is identifiable by its date and number and so less attractive to thieves than coin. True, they are more easily destroyed by fire, but the honest issuer does not take advantage of that accident. The person who “issues” the notes makes his profit by lending out most of the coin deposited, knowing full well that it is vastly improbable that many of the note-holders will all at once want to exchange this new currency for the old heavy bulky and inconvenient coins. Bold competitors will start in the business : on the strength of a little capital, or the pretence of a capital, they will issue notes by way of loan to borrowers without waiting for deposits, and the demand is soon fully supplied. In some such ways redeemable notes get into circulation. At this stage it is natural to say that the notes owe the fact that they circulate to the fact that the issuers must redeem them if required. But something more than redeemability is required to make them circulate ; when a note is redeemed it is at the end of its circula- tion, and what we want to know is rather why notes are not presented for redemption at once instead of circulating. They are kept circulating not because they are redeemable, but because other people than the issuer will take them. That is, because they are convenient to keep in hand in order to make future payments with ; there is, in fact, a demand for this kind of medium of exchange, so that people like to have it in preference to an equal amount of coin. That redeemability, or * convertibility ” as it is

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