Chapter

How Original Sin Was Overcome

Edited by Michael D. Bordo, Christopher M. Meissner and Angela Redish

in Other People's Money

Published by University of Chicago Press

Published in print February 2005 | ISBN: 9780226194554
Published online February 2013 | e-ISBN: 9780226194578 | DOI: http://dx.doi.org/10.7208/chicago/9780226194578.003.0006
How Original Sin Was Overcome

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This chapter presents an historical case study for a group of countries that successfully entered the club and had largely overcome the problem of original sin by the third quarter of the twentieth century. The group consists of several former colonies of Great Britain: the United States, Canada, Australia, New Zealand, and South Africa. The chapter traces out their debt history, relating the currency to the place of issue, exploring the residency of those holding local- and foreign-currency debt, and looking at the maturity of domestic debt in the nineteenth and twentieth centuries. U.S. sovereign debt had implicit or explicit gold clauses until 1933. States and corporations borrowed completely in dollars only by the late nineteenth century and always did so with gold clauses until the gold standard was finally abandoned.

Keywords: original sin; Great Britain; United States; Canada; Australia; New Zealand; South Africa; domestic debt; currency; gold clauses

Chapter.  13246 words.  Illustrated.

Subjects: International Economics

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