Thomas Tooke

A brief viewpoint from Kemmerer on the 1797 to 1821 Bank of England restriction

In Uncategorized on April 30, 2012 at 11:54 pm

Kemmerer writes in 1920:

[…]

“Although the Bank of England suspended specie payment February 27th, 1797, and did not resume redeeming its notes in coin until May 1st, 1821; and although the notes were at a discount in terms of gold and silver during the greater part of this twenty-four-year period — a discount reaching a maximum of about 41% for the year 1814 — the greatest increase in wholesale prices for the period of suspension (using 1797 as the base year) was 49%. This price advance is equivalent to only about two-fifths of the price advance that has taken place in the United States since 1913. Stated in another way, the purchasing power of the United States dollar declined about 62% from 1913 to February, 1920, while that of the irredeemable bank note of the Bank of England declined but 33% during the entire period of the Napoleonic Wars.

[…]

Reading the comparative decline in the pound during the bank restriction versus the first world war and subsequently the second world war and the Vietnam War effect on the USD, it seems that the world is progressing (in the quantity of debasement).

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