Translate the following sentences into English in writing.

1. В 1609 г. в Амстердаме были в изобилии металлические деньги.

2. Очень скоро возникла проблема качества монет, которую решил банк Амстердама, обратившись к системе взвешивания.

3. Все монеты, которые приносили в банк, взвешивали, и на счёт вкладчика заносился вес чистого золота.

4. Вкладчик мог перевести эти деньги на счёт другого лица.

5. Заёмщик знал, что его не обманывают и что он получает точный вес золота.

6. Деньги вкладчиков не лежали мёртвым капиталом. Банк давал их взаймы и за это получал проценты, таким образом, создавались деньги, которые можно было пускать в обращение.

 

Scan TEXT 1 (II) to find the answers to the questions given below.

For better understanding consult the list of terms and

Expressions below the text.

1. What was the essence of John Law's reform?

2. Why did the Banque Royale crash?

3. When did the word "millionaire" come into use and why?

4. What is the difference between "making money" and "creating

money”?

5. Can you explain "getting rich - in or on paper?"

 

Banks and Money (II)

On the continent John Law was engaged in selling an idea for a new kind of bank, the deposits of which would be secured by land rather than by silver or gold. In Paris in 1716, he got permission from the Regent to set up a bank, the Banque Royale. As part of the bargain the bank took over the deb­its of the Regent and of the realm.

In 1717, Law organized the Company of the West, later the Mississippi Company. It held absolute title to all lands north from the Gulf of Mexico and east from the Rockies. There, it was said, gold and silver were in unlim­ited supply. Maps of the period showed the mines, although no one has seen them since. The nonexistent metal in the imaginary mines was the backing for the notes.

Parisians, hearing of these conceptual riches and that colonization was under way to get them, rushed to buy the stock of the Company of the West. The stock boomed. By 1719, the boom had become wild speculation. The price of the stock went up, sometimes by the hour. Law's notes went out by the hundreds of millions. Government creditors who were paid off in the notes then rushed to buy stock in the Banque Royale or in the Mississippi Company. It was a complete closed-circle system for recycling worthless paper¹. In consequence, all involved were getting rich - on or in paper². It is to that year that we owe the useful French word "millionaire". In 1719, John Law was the most famous man in all France.

There was no way but go down, and presently this became evident. Doubts began to develop about the notes. So people started bringing them to the Banque Royale for the silver and gold that were still in Louisiana, and also not there. The Prince de Conti sent three wagons to carry back the gold to which his notes entitled him. Paying off the notes in gold and silver was suspended; in modern terms, the Banque Royale went off the gold (and sil­ver) standard. And, in a further, rather severe step, ownership of precious metals except in small quantities was made a crime. But nothing could dis­guise the elementary fact that the Banque Royale could not pay, that the notes were now worthless. Like the deposits in Amsterdam, Law's notes were money created by a bank. Issued in excess, the notes clearly were a dis­aster.

Source: adapted from “The Age of Uncertainty”

by Galbright J.K.

Notes:

1. It was a complete closed-circle system for recycling worthless paper. - Это была своеобразная система повторной переработки бумаг, не имеющих никакой цены.

2....were getting rich - on or in paper. -...богатели, либо выпуская бумажные деньги, либо приобретая их.

Words and Expressions

to sell an idea - зд. рекламировать, расхваливать

to secure deposits by - гарантировать надёжность вкладов

land (silver, gold) землёй (серебром, золотом)

to set up - учреждать, основывать

bargain - сделка

nonexistent - несуществующий

note - ценная бумага, вексель, банкнота

unlimited supply - неисчерпаемый запас (резервы)

to hold absolute title (to) - иметь право собственности (на)

backing for the notes - обеспечение ценных бумаг, векселей

conceptual (riches) - зд. воображаемые (богатства)

worthless - не имеющий ценности

to pay off - выплачивать

to suspend - приостанавливать

to go off the gold stan­dard - отказаться от золотого стандарта

severe step - зд. суровая мера

precious - драгоценный

to issue notes - выпускать ценные бумаги, векселя

in excess - в избытке

 

Exercises on the Text