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The 100% money proposal of the 1930s: An avatar of the Currency School’s reform ideas?

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  • Samuel Demeulemeester

    (TRIANGLE - Triangle : action, discours, pensée politique et économique - ENS de Lyon - École normale supérieure de Lyon - UL2 - Université Lumière - Lyon 2 - IEP Lyon - Sciences Po Lyon - Institut d'études politiques de Lyon - Université de Lyon - UJM - Université Jean Monnet - Saint-Étienne - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper argues that the 100% money proposal of the 1930s should not (as is often the case) simply be considered as an avatar, extended to deposit currency, of the Currency School’s reform prescriptions. The English Bank Charter Act of 1844, indeed, conveyed a double rejection: it not only sought to divorce the issuing from the lending of money, but also to prevent all kind of monetary management, by enacting a specific issuing rule (the “currency principle”) into law. The 100% money proposal, in contrast, was designed independently of any monetary policy recommendations, leaving open the debate of “rules versus discretion”.
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  • Samuel Demeulemeester, 2021. "The 100% money proposal of the 1930s: An avatar of the Currency School’s reform ideas?," Post-Print hal-03103172, HAL.
    • Handle: RePEc:hal:journl:hal-03103172
    DOI: 10.1080/09672567.2020.1861045
    Note: View the original document on HAL open archive server: https://hal.science/hal-03103172
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    References listed on IDEAS

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    1. James W. Angell, 1935. "The 100 Per Cent Reserve Plan," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 50(1), pages 1-35.
    2. David E.W. Laidler, 2016. "The Golden Age of the Quantity Theory," Economics Books, Princeton University Press, edition 1, number 4959.
    3. Laurent Le Maux, 2018. "Banque centrale et finance. La Banque d’Angleterre, le taux d’intérêt et le Bank Act de 1844," Revue économique, Presses de Sciences-Po, vol. 69(4), pages 541-574.
    4. Henry C. Simons, 1936. "Rules versus Authorities in Monetary Policy," Journal of Political Economy, University of Chicago Press, vol. 44, pages 1-1.
    5. repec:dau:papers:123456789/1787 is not listed on IDEAS
    6. Charles A. E. Goodhart & Meinhard A. Jensen, 2015. "A Commentary on Patrizio Lainà's 'Proposals for Full-Reserve Banking: A Historical Survey from David Ricardo to Martin Wolf'," Economic Thought, World Economics Association, vol. 4(2), pages 1-20, September.
    7. Samuel Demeulemeester, 2018. "The 100% money proposal and its implications for banking: the Currie–Fisher approach versus the Chicago Plan approach," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 25(2), pages 357-387, March.
    8. Sylvie Diatkine & Jerome de Boyer, 2008. "British monetary orthodoxy in the 1870s: A victory for the Currency Principle," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 15(2), pages 181-209.
    9. Laidler, David E, 1988. "British Monetary Orthodoxy in the 1870s," Oxford Economic Papers, Oxford University Press, vol. 40(1), pages 74-109, March.
    10. Allen, William R, 1993. "Irving Fisher and the 100 Percent Reserve Proposal," Journal of Law and Economics, University of Chicago Press, vol. 36(2), pages 703-717, October.
    11. Arnon,Arie, 2011. "Monetary Theory and Policy from Hume and Smith to Wicksell," Cambridge Books, Cambridge University Press, number 9780521191135.
    12. William J. Barber, 2005. "Irving Fisher of Yale," American Journal of Economics and Sociology, Wiley Blackwell, vol. 64(1), pages 43-55, January.
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    Cited by:

    1. Samuel Demeulemeester, 2022. "What analytical framework for Sovereign Money? Some insight from the 100% Money literature, and a comment on criticisms," Working Papers hal-03751756, HAL.
    2. Samuel Demeulemeester, 2022. "Divorcing money creation from bank loans: revisiting the “100% money” proposal of the 1930s [Dissocier la création monétaire des prêts bancaires : retour sur la proposition "100% monnaie"," Post-Print hal-03938669, HAL.

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