Capital, currency, and banking; a ser. of articles publ. in The Economist (Google eBook)

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1847
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Page 40 - Whoever buys, gives, whoever sells, receives such a quantity of pure gold or silver as is equivalent to the article bought or sold; or if he gives or receives paper instead of money, he gives or receives that which is valuable only as it stipulates the payment of a given quantity of gold or silver.
Page 85 - That the prices of commodities do not depend upon the quantity of money indicated by the amount of bank notes, nor upon the amount of the whole circulating medium ; but that, on the contrary, the amount of the circulating medium is the consequence of prices.
Page 45 - But we do not want an abundant supply of cheap promissory paper. We want only a certain quantity of paper, not, indeed, fixed and definite in nominal amount, but just such a quantity of paper, and that only, as shall be equivalent in point of value to the coin which it represents. If the paper be cheaper than the coin, it is an evil and not an advantage.
Page 67 - ... liable to be issued in excess, and are consequently subject to depreciation. Second, That convertibility is not alone a sufficient guarantee that a mixed currency of bank notes and coin shall conform, in its variations, to the same laws that would regulate a purely metallic currency. Third, That issuers of bank notes have power to increase or decrease the circulation at pleasure. Fourth, That, by...
Page 268 - By an agreement between the different banks, they never called upon each other to pay their notes in specie ; and thus each bank always held large quantities of the notes of other banks, for which they did not demand payment; and such was the political prejudice against the payment of specie, that any private individual who demanded the payment of specie to any large amount, was marked as a common victim by the banks.
Page 81 - ... articles. Indeed, this is a principle upon which all the writers on Commerce, both practical and speculative, are agreed ; they have thought it so undeniable as to require no particular illustration, and have rather assumed it as an obvious truth than as a proposition that depended on inference. Upon this idea is founded Mr. Hume's well-known argument against Banks, and it is equally implied in Dr. Smith's confutation of that objection ; it forms the foundation of those presumptions from which...
Page 99 - by law there has never been any restriction against any one issuing notes in Scotland; yet, in practice, it has ever been impossible for any unsound or unsafe paper to obtain currency." * And thus the natural guarantee in the one case has been more efficient than the legislative one in the other. The gain in economy is proved by the fact that Scotland has carried on its business with a circulation of 3,500,000...
Page 76 - ... only the same relationship to other commodities, in value, that it would continue to have had as an article of simple barter ; the only difference being that all variations are expressed by the smaller or greater quantity of gold (money) that, at any given time, will exchange for a certain quantity of any other commodity. The immediate exchangeable value of any commodity is determined by the proportion which the supply bears to the demand...
Page 83 - Thornton admits, in the most explicit manner, that if the "quantity of circulating medium is permanently augmented, " without a corresponding augmentation of internal trade, a " rise will unavoidably take place in the price of exchange" able articles. Indeed this is a principle upon which all the " writers on Commerce, both practical and speculative, are " agreed: they have thought it so undeniable as to require " no particular illustration, and have rather assumed it as an
Page 215 - Money, therefore, the great wheel of circulation, the great instrument of commerce, like all other instruments of trade, though it makes a part and a very valuable part of the capital, makes no part of the revenue of the society to which it belongs; and though the metal pieces of which it is composed, in the course of their annual circulation, distribute to every man the revenue which properly belongs to him, they make themselves no part of that revenue.

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