Modern monetary systems

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Monograph

Identifikator:: 832279064

URN:: urn:nbn:de:zbw-retromon-64432

Document type:: Monograph

Author:: Worms, Émile

Title:: L' Allemagne économique ou histoire du Zollverein Allemand

Place of publication:: Paris

Publisher:: Ainé

Year of publication:: 1874

Scope:: 1 Online-Ressource (VII, 631 S)

Collection:: Economics Books

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210 MODERN MONETARY SYSTEMS cess of exchange and we have observed that by limiting the convertibility of fiduciary currencies into gold to re- quirements for payments abroad and by keeping for this purpose a reserve of gold coin which would otherwise be lost in the internal circulation, it provides a much greater margin of security than the method of making notes con- vertible without limit and retaining the internal circulation of yellow metal. It cannot be reasonably argued that this system is more artificial than the older system of fiduciary currency, nor the one by which a given number of the same monetary units are assigned to coin of different metal. If there has been in our modern monetary systems any artifice, fruitful though not without its dangers, it has been the creation and diffusion of bank-notes which are legal tender currency and ultimately govern the entire monetary circulation and may become suddenly incon- vertible! But it is a mere question of form whether con- vertibility shall be complete or limited to foreign require- ments, whether it shall be effected by a direct transport of yellow metal or by the transmission of a 4i/l payable in gold, whether it shall be in the hands of a bank of issue or of a more or less independent organisation. The Bank of Austria-Hungary, as we have seen, played the part of a conversion office or exchange office without any official differentiation between its monetary task and its banking task. When we face the problem which has to be solved it is therefore clear that to adopt the gold exchange standard merely amounts toadopting one method of returning to the gold standard and to gold points by establishing the con- vertibility of the fiduciary note issue. This method is more economical and more rational and is not a mere expedient, as some authors like to have it understood. And if the idea of stabilisation is contrasted with that of merely sup- pressing legal tender currency, it can only be because the former method appears to imply the adoption of a #ew parity. But here again there is no fundamental opposition between the system of the gold reserve and the old system of a gold standard with gold in circulation at home; for

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