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 I. General principles

Collection:: Economics Books

18 MONEY provided the coin may be melted and it or bullion may be exported. Money is still reckoned in a coin which is convertible into bullion, and therefore cannot go below its bullion value. The conditions of the supply of the convertible notes prevent the value of any of them from going below the value of the coin, and the coin cannot go below the value of its contents because the supply of it would then be reduced by melting. That the supply of the convertible notes of any denomination cannot be so large as to cause a gap to appear between their value and that of the coin they promise to pay is so obvious as to scarcely need explanation. If there was such a gap any one who had one of the notes would run to the issuers to get it redeemed : the note by hypothesis is circulating at par : a pound note pays a pound debt and buys an article priced at a pound, and ““ the change” for it is twenty shillings, which all the arithmetic books agree in making a pound. Any gap between it and sovereigns would therefore appear in the form of a sovereign being worth more than a pound, and if a sovereign could be openly sold for more than a pound, notes would be rushed in for redemption by holders anxious to make a profit, until parity was reached again, or all the notes paid off, or the issuers bankrupt and the notes out of circulation. Convertible notes thus cannot be kept outstanding in numbers which would lead to their being less in value than the coin they promise to pay, and a fortiori they cannot be issued in such numbers : it follows that no more can be put into circulation than will be compatible with their keeping their par value. The bankers may try to get more into circulation by paying all their own household bills with them, but if there are enough out already, this will only end in the tradesmen presenting the notes for redemption. It may occur to some banker before breakfast, when the intellect is weak,

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