RECOVERY OF THE EXCHANGES 41 
was exposed to the repercussion of the failure of other 
monetary systems as a result of the Great War.1 
§ 4. Comparison between the Conversion Office in the Argen- 
tine and the ‘Gold Exchange Standard’ in the Far East. 
Identical principles and same essential conditions in the 
working of new methods as in the traditional system of 
the gold standard. 
It is easy enough after this brief analysis of the mone- 
tary system adopted in the Argentine to grasp the analogy 
between it and the Indian system of the Gold Exchange 
Standard,? and also the essential characteristics which it has 
in common with the traditional gold-standard systems. 
As in India and in those silver-standard countries which 
had followed its example, the internal currency had suf- 
fered no change; but owing to the convertibility of the 
national currency into gold at a fixed rate and the existence 
of sufficient available yellow metal, gold was the monetary 
instrument and standard for foreign payments. Thus the 
Argentine also had independently discovered and adopted 
the “gold exchange standard.” 
Moreover, the fact that the currency, consisting as it 
did of paper and not of silver, was strictly fiduciary in 
character, was necessarily favourable to the success of this 
system ; for there was no longer the risk that, with the 
appreciation of the metal, silver coin would acquire a 
greater commercial value than its legal rate, and that it 
would be exported at a price which would alter the 
exchange limits. 
Again, although the conversion of notes into gold was 
not in theory subject to proof that the gold was required 
for payments abroad, with the continuous use of paper 
1'The causes and effects of subsequent changes in the monetary system 
of the Argentine will be described in the following chapter. 
2 In spite of this analogy, the reform in the Argentine does nor appear to 
have been inspired by the example of India, then little known; moreover, 
there was already a direct precedent for it in the exchange office set up in 
February 1867, which had worked satisfactorily until May 1867. (See 
esp. Subercaseaux, “Le papier monnaie,” p. 392, and J. H. Williams’ 
“Argentine International Trade under Inconvertible Paper,” p. 29.)