VALUE OF NOTES 
55 
issuers. The pound sterling, for example, in multiples 
and fractions of which all prices in this country are 
reckoned, ceases to be 113 grains of fine gold and 
becomes simply “ £1’ (or one-fifth of £5 and so on), 
when printed on a genuine note, and the amount of 
these symbols printed is determined by what the 
Treasury thinks fit. 
When the value of money is thus surrendered to the 
discretion of Government issuers, it usually goes down 
and the general level of prices goes up rapidly. The 
surrender usually takes place at a time of financial 
difficulty, so that the very object of destroying 
convertibility is to remove the necessity the Govern- 
ment or others are under of fulfilling their promises 
to pay something equivalent to certain definite 
quantities of bullion. In the present state of economic 
instruction in all countries there is no Government 
and no people which is likely to understand what is 
happening. The issuers find that further issues 
themselves directly bring in money easily and appar- 
ently cheaply, and very likely at first greatly assist 
borrowing in other ways by the feeling of ease and 
prosperity which ‘“ plenty of money *’ at first creates. 
Many other persons profit enormously by the rise 
in the prices of the things they sell. So there is a 
strong bias in influential quarters in favour of more 
and more notes, v' °° ' -Js to many arguments in 
their favour. 
I. At first when the rise of prices is not yet very 
perceptible, it is usual to deny that general prices 
have risen. This contention soon disappears, as the 
issue goes on and prices rise further. 
2. Next comes the contention that though prices 
have risen, the currency is quite sound because it is 
still on a level with bullion-~the price of bullion has 
not risen. This is untrue, but usually difficult to 
disprove, because the time is probably one of con- 
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