INDONESIA: The Magic Scissors

The black financial magic by which governments raise or lower the value of their currencies amid incantations of economic mumbo-jumbo is apt to baffle all but the most sophisticated spectators. But last week the government of "backward" Indonesia, whose guilder was badly inflated, devised an ingeniously simple new method that anyone could grasp, for letting the air out of their currency. Indonesian Finance Minister Sjafruddin Prawiranegara ordered Indonesians to get out their scissors and cut in half their paper money above five guilders.

The left halves of the banknotes will be legal tender at half their face value until April...

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