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

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Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Part I. General principles

Collection:: Economics Books

(6 MONEY readily accepted if allowed. When desirous of issuing inconvertible notes themselves, they pay no attention to the arguments against small notes and thus their issue satisfies a previously existing demand. After this preface about the nature and origin of “ paper currency’ we come to the question, what sffect it has on the value of the unit of account, or, in other words, on general prices. We must be careful not to fall into the mistake of imagining that because a note-issue circulates at a par with coin, as for example a five-pound Bank of England note before the war would readily exchange for five sovereigns, therefore everything in regard to the value of money and prices is just as it would be in the absence of the issue. The extent to which notes take the place of coin is commonly very much overrated. Writers have sometimes supposed that every issue displaced an amount of coin equal to its own total amount less any reserve kept against it by the issuers. Thisis very far from being true, since the superior convenience of notes for the higher denomina- tions of currency—that is for sums above five shillings or perhaps something rather less—leads to a much larger quantity of currency (coin plus notes) being kept on men’s persons than if there are no notes. Nevertheless it is true that all or most note-issues do to some extent economize or ‘‘ displace” coin, and thereby reduce the demand for it. We may certainly take it that the general tendency of note- issues, especially when the notes are for small sums and therefore compete with coin much more than with other machinery for paying money, is to reduce the demand for coin, though they need not displace coin to their full amount. Where the coin is restricted and has a much higher value than its metallic contents, a note-issue, although it retains its par value in coin, may thus have a

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