Analysis of Mill's Principles of Political Economy

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13. 81 (i) Refutation. What is the good of paper re- presenting property which cannot be claimed in exchange for the notes ? It may be said that it is a guarantee of the final solvency of the issue. But insolvency is only one of the evils to which a paper currency is liable. Another evil is depreciation in value from excessive issue, cf. the Assignats of the French Revolution, which were supposed to repre- sent the lands of the Crown, the Church, etc. They depreciated to such an extent that the... result was that at last an assignat of 600 frs. was required to pay for a pound of butter. This, however, repre- sented land in general. Would it be possible to have paper representing a definite quantity of land ? The plan would certainly have advantages over that which was pursued, and might be an assistance in selling rapidly a great quantity of land with the least possible sacrifice. But what advan- tage would a currency convertible into land (which is more variable in value than gold, and is to most persons an encumbrance rather than a desirable possession) have over a currency convertible into coin ?

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