ABSTRACT
Devaluation in itself does not constitute a reform of the monetary system. The gold value of the monetary unit may be changed without thereby causing any change in the system itself. It is only if devaluation results in a fundamental change in the working of the monetary system that it can be considered as a monetary reform. Devaluation cannot bring about a fundamental change in the system unless it is a drastic devaluation. A devaluation that merely adjusts a currency to its changed economic parities does not in itself alter the system in any way, even though it facilitates the working of the old system. But a devaluation which is sufficiently drastic creates a large real surplus in the gold reserve, and thus may be considered to have brought about a reform of the monetary system.
