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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

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?," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 28(4), pages 577-598, July.
    • Handle: RePEc:taf:eujhet:v:28:y:2021:i:4:p:577-598
    DOI: 10.1080/09672567.2020.1861045
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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.
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    4. Henry C. Simons, 1936. "Rules versus Authorities in Monetary Policy," Journal of Political Economy, University of Chicago Press, vol. 44(1), pages 1-1.
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    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.
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    Cited by:

    1. Eric Magnin & Nikolay Nenovsky, 2024. "Soft monetary constraint and shortage in the European sovereign debt economy," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 37(1), pages 55-80, March.
    2. Samuel Demeulemeester, 2024. "The case for 100% money: Ten reasons for separating money issuance from banking," Economic Affairs, Wiley Blackwell, vol. 44(1), pages 57-70, February.
    3. 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.
    4. 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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