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 II. Further elucidations

Collection:: Economics Books

THE DEMAND FOR CURRENCY 73 if you occupy a £1,000 house than if you occupy a £2,000 house, so you are a less important demander of currency if you keep on the average £5 in your pocket than if you keep £10. The usual talk of “ velocity of circulation *’ is only a clumsy attempt to express this truth. If we say that additional sales and purchases may be effected without alteration in the value of money provided the velocity of its circulation is increased, we may equally say that additional transfers of houses may be effected without altering the value of houses, provided the velocity of the circulation of houses is increased. We do not say that, because the futility of it would be obvious ; it is so much simpler to disregard both the transfers and the velocity of the circulation of houses and come at once to the ultimate demand, the demand for houses to hold. It may be said that, in addition to the demand of persons and institutions for currency to kold, there is also sometimes a demand by banks and governments for currency to destroy, as, for example, happens when the bank or the treasury is reducing the aggregate amount of notes outstanding. But as this demand always, or almost always, comes from institutions which have issued quantities of paper and subsequently repented, it is usually regarded as simply reducing the supply instead of increasing the demand. In favour of regarding the institution as a demander, it may of course be said that the fact that it acquires the currency to burn rather than to hold is immaterial, since it makes no difference whether the currency acquired is held or burnt, provided it is not reissued. It is, some one may say, all the same whether notes which have been with- drawn have been cancelled or are still held by the issuers uncancelled. But this is not quite true, since, if the notes were still held, they would appear

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