CONTENTS

§ 3. BANKS AND PRICES . \

X1

PAGR
« 79-85

Economy of currency effected by banks : . 79-80
Not to be measured by the magnitude of deposits . 80-81
Deposits do not form an addition to the currency . 81-3
Banks do not control prices except in a very limited
and temporary sense  . 83-5

§

THE EFFECT OF ** COVER ”’ ON THE VALUE OF
PaPER CURRENCY . .

When the paper is convertible
When it is inconvertible

+

$s.

“ SCARCITY OF COMMODITIES ”’ AS A CAUSE
oF Higa PRICES . .

85-9
85-7
87-9

89-91

A diminution of commodities other than money would
be a reason for diminishing, not for increasing currency 8g
Fluctuations in the plentifulness of commodities are
negligible " 89-qg1

PART III. THE RECENT HISTORICAL
EXAMPLE

§ 1. PRICES RECKONED IN GOLD

. 92-3
Have risen in consequence of diminished demand for

gold

92-3

§ :. PRICES RECKONED IN PAPER . . .93—107

Booms created by the optimism of private persons
are short-lived, because such persons cannot create currency
 to pay with . . . ‘ . .
But governments maintained by liberal creations of
paper currency the boom which was started by the
promise of enormous expenditure on the War. . 06-8
The supposed advantages of this were delusive 98-9
And the disadvantages enormous . . C9~-101
Reintroduction of limitation of currency in Great
Britain in 1920 . 101-7

93-6