Political economy

Bibliographic data

Monograph

Identifikator:: 867647221

URN:: urn:nbn:de:zbw-retromon-93157

Document type:: Monograph

Author:: Chapman, Sydney John http://d-nb.info/gnd/123743141

Title:: Political economy

Place of publication:: London [u.a.]

Publisher:: Williams & Norgate [u.a.]

Year of publication:: 1912

Scope:: 1 Online-Ressource (255 Seiten)

Collection:: Economics Books

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70 MODERN MONETARY SYSTEMS countervalue in paper at the new rate at the moment of withdrawal of the deposit. Thus in order to obviate the decline in purchasing power there came 20 be applied in practice a coefficient which was proportional, not to he increase in the cost of living, i.e., the decrease in the internal purchasing power of the currency, but to the rate of exchange. Now as the external depreciation of the mark had been greater and more rapid than its internal depreciation, the general introduction of contracts in stable currencies, in which the dollar was in fact the standard and the paper mark became a mere instrument of payment, ended by accelerating the rise in prices in Germany and forced the internal depreciation almost to the level of the external depreciation, not with- out some risk of the former overtaking the latter.! Prices then become absolutely dependent on the exchange, itself subject to all the vicissitudes of disordered speculation. So the very effort to avoid the disadvantages of an un- stable mark only hastened its downfall, without resolving satisfactorily the peculiar accounting difficulty which arises in industry and commerce. Henceforward the fluctua- tions of the mark no longer made themselves felt from day to day, but from hour to hour and almost from one minute to another, and merchants with one eye fixed on the exchange quotations altered their prices several times a day. But though they made certain in this way of re- ceiving a sum in paper marks equivalent at the moment of sale to a certain sum in dollars, they could not tell what they could buy with those paper marks on the evening of the same day if they had not immediately covered them- selves by converting their marks into foreign exchange. These fruitless attempts seem to demonstrate that a solution of the problem of stabilising a standard of values can only be found in stabilising the instrument of exchange itself.2 1 Internal depreciation can overtake external depreciation because dealers discount an anticipated fall in order to make certain of making their profits and renewing them. 2 Tt is true that a monetary unit may be claimed to have been stabilised

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