One of the interesting features in the study of indernational monetary theory is that some problems arise in a multi-currency context that are not so obvious in "domestic" monetary theory. One such problem which has received little attention, concerns a phenomenon that might be called "currency sunstitution." By currency substitution, abbrevieated CS, we mean the degree that currencies are sunstitutes in the portfolio of ultimate wealth holders. The word "currency" refers specifically to money (to be defined more precisely below) as opposed to interest bearing recorded in capital accounts entries of balance of payments accounts.