42 MODERN MONETARY SYSTEMS 
money the habit was acquired of never demanding the re- 
imbursement of notes in order to bring gold into circula- 
tion, and the Conversion Office ix fact played the part of an 
exchange office, similar to the one at Manilla. For the same 
reason, anyone receiving gold from abroad was naturally 
led to deposit it with the Conversion Office, and with- 
draw in exchange the notes which constituted the normal 
internal currency.! 
The monetary system of the Argentine may therefore 
be said to be identical with the gold exchange standard of 
the Far East except that the internal currency, consisting 
only of notes, was entirely fiduciary in character, and that the 
Conversion Office supplied gold on the spot to those who 
were obliged to export it, instead of issuing a draft drawn 
on a gold deposit held abroad. 
But this last variation, which merely involves a question 
of form, also brings out the fundamental similarity between 
the traditional gold-standard systems and this 7égime, which 
contained nothing new except in some of the subsidiary 
methods used. Indeed the only difference was that, in the 
new gold-standard system, gold, instead of being partially 
brought into internal circulation, was reserved for any 
requirements in connection with foreign payments. But as 
the internal currency was freely convertible, this stock of 
gold could be used up to its last ounce for payments 
abroad, and iz is only the traditional effect of the gold points 
which stabilised the exchanges with all other countries having 
gold currencies. For the right to obtain gold at the rate 
1 It may be pointed out that under this method the currency tends to 
expand when the Trade Balance shows a credit—one element in a 
favourable exchange position—and to contract in the opposite event. In 
fact, we have here another analogy with the system of the gold exchange 
standard in the Far East. This provision does not, however, appear to have 
been dictated by the desire to bring about an automatic contraction and 
expansion of the currency; for the originators of the system were more 
experienced and practical than the Anglo-Saxon theorists who described 
the gold exchange standard. It will, moreover, be observed that, without 
affecting the exchanges, the working of this system more than doubled the 
fiduciary currency of the Argentine in the decade following the creation of 
the Conversion Office, a rate which seems more than proportional to the 
Increase in transactions.