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MONEY 
perfectly possible. From August, 1914, to April, 
1925, the British Treasury’s £1 and 10s. Currency 
notes were legally convertible at the Bank of England, 
and as a matter of fact were converted for sufficiently 
insistent demanders who knew enough not to fail in 
the vivd voce examination to which they were sub- 
jected. But during that period exportation had been 
made impossible, and the using of the coin for any 
purpose except currency was forbidden, so that the 
person who went to the Bank and received a sovereign 
might just as well have got a round disc of cardboard 
with ‘“ legal tender for £1 >’ on one side and Sir John 
Bradbury’s head on the other, or better still, he might 
have stayed at home and spent his £1 note like other 
people. The Currency note could be converted into 
a full-weight coin, and was therefore described as 
convertible, but it was not convertible into free gold 
of the weight of the sovereign, since the sovereign 
could not be converted into free gold. 
Thus convertibility of the note into coin is deprived 
of all its virtue when laws against melting and exporta- 
tion of the coin are present and effective. Convertible 
notes can then be issued without check just like 
inconvertible notes, and consequently can drag down 
the value of money below that of the bullion contents 
of the coin and give rise to the same phenomenon, a 
rise of general prices including the price of bullion. 
When the issuers of inconvertible notes or notes 
which are only convertible into inconvertible coin 
issue them so freely that they will exchange for less 
than the par amount of bullion, when, that is, in 
other words, the price of bullion rises above the par 
price, so that the note will no longer buy raw material 
for the coin which the note represents, the unit of 
account ceases to be a coin or quantity of metal and 
becomes a printed symbol on a piece of paper the 
supply of which depends on the moderation of the