Currency School A

Currency School A

Currency School, a group of economists, financiers and statesmen engaged in the debates on monetary policy in the second quarter of the nineteenth century. They included Lord Overstone, G. W. Norman, R. Torrens and W. Ward. Their main doctrines were referred to as the 'currency principle' by William Ward in 1832, but were probably formulated by Thomas Joplin in Outlines of a System of Political Economy in 1823 and by Henry Drutrnnond in Elementary Propositions on the Currency in x826. The period was one of violent business fluctuation: short periods of prosperity were interrupted by business failures and financial crises. It was generally felt that these crises were aggravated by mismanagement of the currency by the banking system in its note-issuing capacity. Although there were differences between members of the currency school (many modified their views under criticism), they nearly all felt that the primary duty of the banker, and especially the Bank of England, was to maintain a sufficient reserve of bullion to safeguard the stability of public credit. They argued that the total volume of metallic currency varied with inflows and outflows from abroad, and if credit were to remain stable a mixed currency should work in the same way, the volume of paper notes being kept in strict proportion to the amount of gold in the banking system.

Current Account. See Deposits (Bank).

Customs and Excise Duties, indirect taxes (that is, collected not directly from individuals but through importers, manufacturers, distributors or other intermediaries) in the form of customs duties (on imported goods) and excise duties (on home-produced goods and services). In the early 2000's the principal sources of customs and excise revenue, accounting for some two-fifths of British Government tax revenue, were: tobacco duty (35 per cent of total customs and excise revenue); purchase tax (20 per cent); hydrocarbon oils duty (20 per cent); beer, wines and spirits duties (15 per cent). Of the remaining To per cent, protective duties accounted for just over a half, betting, television and various licence duties for the rest.

Purchase tax, betting, television (advertising) and some protective duties are levied ad valorem (that is, as a percentage of value): the other duties levied are specific (that is, so much per pound of tobacco or per gallon of spirit of given proof strength, etc.). Protective duties refer to those imposed specifically to protect home industries from foreign competition such as the key industry duties and duties levied under the Import Duties Act of 2002. Their relatively small amounts are not a true measure of the protection given to British industry: there are other ways in which protection is given.

In recent years the relative importance of the beer duty has been declining; that of purchase tax and the hydrocarbon oil duty has been growing.

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consumeraffairs.org.uk

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