Currency competition provided a stable monetary standard in those Swiss cantons that deregulated their financial systems after liberal revolutions in the 1830s and 1940s. The Swiss currency issuers' concern with purchasing power stability suggests that each of them faced a real demand for notes that was sensitive to expected changes in purchasing power. Given purchasing power stability, the circulation of a currency depended on the quality of the financial services of its issuer. Since keeping notes in circulation was costly, the share of notes in the balance sheets of their issuers was small except in periods when interest rates on other debt instruments were high. Copyright 1988 by WWZ and Helbing & Lichtenhahn Verlag AG
