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AGIO (Ital. aggio, exchange, discount...

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Originally appearing in Volume V01, Page 376 of the 1911 Encyclopedia Britannica.
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AGIO (Ital. aggio, See also:exchange, See also:discount, See also:premium) , a See also:term used in See also:commerce in three slightly different connexions. (a) The See also:variations from fixed pars or rates of exchange in the currencies of different countries. For example, in most of the See also:gold-See also:standard countries, the standard See also:coin is kept up to a See also:uniform point of fineness, so that an See also:English See also:sovereign fresh from the See also:mint will See also:bear the following See also:constant relation to coins of other countries in a similar See also:condition:—£t =fres. 25.221=mks. 20.429=$4.867, &c. This is what is known as the mint See also:par of exchange. But the mint par of exchange, say, between See also:France and See also:England is not necessarily the See also:market value of See also:French currency in England, or English currency in France. The See also:balance of See also:trade between the various countries is the See also:factor determining the See also:rate of exchange. Should the balance of trade (q.v.) be against England, See also:money must be remitted to France in See also:payment of the indebtedness, but owing to the cost for,the transmission of specie there will be a demand for bills See also:drawn on See also:Paris as a cheaper and more expeditious method of sending money, and it therefore will be necessary, in See also:order to procure the one of the higher current value, to pay a premium for it, called the agio. (b) The term is also used to denote the difference in exchange between two currencies in the same See also:country; where See also:silver coinage is the legal See also:tender, agio is sometimes allowed for payment in the more convenient See also:form of gold, or where the See also:paper currency of a country is reduced below the See also:bullion which it professes to represent, an agio is payable on the appreciated currency. (c) Lastly, in some states the coinage is so debased, owing to the See also:wear of circulation, that the real is greatly reduced below the nominal value. Supposing that this reduction amounts to 5%, then if See also:loo sovereigns were offered as payment of a See also:debt in England while such sovereigns were current there at their nominal value, they would be received as just payment; but if they were offered as payment of the sameamount of debt in a See also:foreign See also:state, they would be received only at their See also:intrinsic value of £95, the additional 5 constituting the agio.

Where the state keeps its coinage up to a standard value no agio is required.

End of Article: AGIO (Ital. aggio, exchange, discount, premium)

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