ABSTRACT
The foreign money which was elected to be thus stabilised in price was as a rule the dollar; and as the dollar had retained throughout its original value in terms of gold, this involved the restoration of a gold standard. In some countries, such as France, an exaggerated sense of the difficulty of maintaining the external value of the money may continue to check the money supply unnecessarily, and to hamper the rise of the internal price-level to its natural level. The Government's chequery at the Bank of England is swollen by £1,000,000 and on this chequery it draws a cheque for £1,000,000, which it pays to the stationer, who pays it into his bank, which pays it into its chequery at the Bank of England. Thus the price of foreign money soars upward out of proportion to the price of goods and services produced at home.
