Money pp 24-65 | Cite as

Notes and Bank Deposits

  • Roy Harrod


A man may deposit some gold (or silver) in a bank and receive a certificate that he has done so, which also constitutes a promise by the bank to repay him his gold on demand. He may then use this certificate as money. He may give it to someone to whom he has to discharge a debt. ‘ Look, here is this promise by the famous bank X to pay me in gold; if I give it to you, it will pay you the gold.’ We may call these certificates bank-notes. They may be a convenient substitute for gold, both for carrying about, especially in large denominations, and for sending through the post.


Monetary Policy Central Bank Commercial Bank Money Supply Treasury Bill 
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  1. 1.
    ‘The Report of the Bullion Committee (1810)’, reprinted in E. Carman’ s The Paper Pound (1920);Google Scholar
  2. Economic Essays (1966), edited by E. C. K. GonnerGoogle Scholar
  3. Professor Foxwell’ s in-troduction to Andreades’ s History of the Bank of England (1966);Google Scholar
  4. R. G. Hawtrey, Currency and Credit (1919), 3rd edition, ch. 18.Google Scholar

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© Roy Harrod 1969

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  • Roy Harrod

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