Front Page Titles (by Subject) Saving of Interest. - Money and the Mechanism of Exchange
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Saving of Interest. - William Stanley Jevons, Money and the Mechanism of Exchange 
Money and the Mechanism of Exchange (New York: D. Appleton and Co. 1876).
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Saving of Interest.
A further and very potent motive for employing representative tokens or notes, consists in the saving of interest and capital, which is effected by substituting a comparatively valueless material in place of costly gold and silver. Whenever a nation is in great straits for want of revenue, there is a great temptation to treat the metallic currency as a treasure to be temporarily borrowed for the necessities of the state. The ancient Greeks understood this as well as the modern English, Italians, or Americans. Dionysius, on this ground, obliged the Syracusans to accept tin tokens in place of silver coins, worth four times as much in metallic value. In the book on Economics, attributed to Aristotle, we are told that Timotheus the Athenian persuaded the soldiers and merchants to receive copper money in place of silver, promising to exchange it for silver coins at the close of the war. The Clazomenians made a similar issue of token money avowedly for the sake of the interest thereby saved. Being unable to pay twenty talents due to some mercenary troops, they were under the necessity of paying four talents a year as interest. They fell upon the device of coining iron tokens to the nominal amount of twenty talents, which they obliged the citizens to take in place of silver coin. The silver thus obtained was used for the immediate discharge of the debt, and there was a spare annual revenue of four talents, formerly absorbed in the payment of interest, which now enabled them in a few years to redeem the token money. Closely parallel to this is the case of the Guernsey Market, which was built without apparent cost. Daniel le Broc, the governor of the island, determined to build a market in St. Peters, but not having the necessary funds, issued under the seal of the island four thousand market notes for one pound each, with which he paid the artificers. When the market was finished and the rents came in, the notes were thereby cancelled, and not an ounce of gold was employed in the matter. There is, however, no mystery in this advantage of paper money.
Daniel le Broc, by issuing his market-notes, drove an equivalent amount of gold out of circulation, and thus effected a kind of forced loan out of the metallic currency of the island, without paying any interest for it. A similar gain of interest accrues upon all paper notes so far as their amount exceeds the gold held in readiness to pay them. The private and joint stock banks of issue in England in this way enjoy the interest upon a sum of about six millions and a half sterling, the Scotch banks upon two millions and three quarters, and the Irish banks upon more than six millions. The issue of paper representative money is beneficial to all parties, provided that it be conducted upon a sound method of regulation, a subject upon which the greatest differences of opinion exist.
The Nature and Varieties of Promissory Notes
Before attempting to come to any conclusion as to the best mode of regulating the issue of promissory notes, we must carefully analyse the differences which may exist between one promise and another. What seems at first sight a very slight and subtle distinction, may be found to lead to important results. He who issues a representative or promissory document, engaging to give a certain quantity of a defined commodity in return for the document when presented, may really make any one of three distinct engagements.