NORMAL EXCHANGES 109 
convertible into the currencies of other countries by export, 
import and re-coinage.! 
If, on the contrary, it is possible to obtain at a constant 
rate, either by taking it out of circulation or by buying it 
from the bank of issue or any other establishment ap- 
pointed for the purpose, the gold necessary for export and 
to receive imported gold under similar conditions, the 
exchange will be confined within the limits of the gold points 
so long as convertibility is maintained; this will be a 
system of stable exchanges. 
It 1s important to emphasise what exactly is meant by a 
stable exchange and by the stabilisation of exchanges. 
For many highly-qualified experts who have not made a 
sufficiently detailed examination of the subject have been 
led to imagine that stabilisation consisted in ‘‘determin- 
ing” the exchange by “artificial” means and by preventing 
the normal factors from operating. In fact, as is clearly 
shown in Chapters III and IV of Part I of this book, 
stabilisation usually consists merely of re-establishing the 
gold points by making the internal currency again con- 
vertible into gold currency. 
§ 2. Stabilisation and the return to the gold standard: system 
of convertibility limited to external requirements. Funda- 
mental similarity between various systems of gold 
standard. 
It would therefore be quite false to contrast stabilisation and 
the return to the gold standard. Stabilisation is merely one 
method of returning to the gold standard, which rests on the 
same basis as any other method of converting internal 
currency into gold; further, it is desirable for reasons of 
convenience. 
We have seen above how the method described as being 
that of the gold exchange standard or of the gold reserve 
quite naturally follows from the elementary technical pro- 
1 As, for example, in Sweden, where, the import of gold being prohibited, 
exchanges are disturbed even with countries on a gold currency where the 
export of gold is permitted. 
2. 
g