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Commercial banks still could create money by lending more than their depositors had placed with the bank, but they no longer had the right to issue banknotes.
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Central banks have not always existed. In early economies, governments would supply currency by minting precious metals with their stamp. No matter what the creditworthiness of the government, the worth of the currency depended on the value of its underlying precious metal. A coin was worth its gold or silver content, as it could always be melted down to this...
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