INTERNATIONAL PAYMENTS 211 
holdings of the metal, coupled with its power to issue more or less 
of notes as commercial transactions varied, enabled it to maintain 
its rate of discount at a singularly stable level. And that stability 
was a matter of deliberate policy. The dominant place of the 
Bank in the general credit and financial transactions of the coun- 
try — its position as preéminently a bankers’ bank, buttressed 
by its monopoly of note issue and its large “encaisse ” — enabled 
it to impart stability not only to its banking policy but to the entire 
monetary and credit structure of the country. 
As regards sensitiveness, it thus appears that France was in a 
situation by no means the same as that of Great Britain and the 
other deposit-using countries. What with the large circulation 
of actual gold, and the strong position and fixed policy of her great 
Bank, there was sluggishness in the response to an international 
movement of specie. True, that movement was watched with 
interest and even with concern by the French financial community. 
There was a steady disposition to influence it in the direction of 
promoting the inflow of gold. But it was not allowed to impinge 
quickly on discount rates, bank operations, bank credits. Nor 
could any foreign gold movement serve to increase or decrease 
effectively the total circulating medium, except over long periods 
of time. As compared with the total gold in France — that in 
circulation plus the Bank of France’s holdings — the import or 
export of the metal in any one year, or over several years, was a 
small matter. 
No doubt, gold was the dominant factor in the French monetary 
system. A steadily continuing increase or decrease of the coun- 
try’s gold could not fail to have its effect on prices. Domination 
thus there was, even tho not sensitiveness. But the situation 
serves to bring into sharp relief a factor which Ricardo and his 
followers habitually neglected — the element of time. Given 
time, a country whose circulating medium consists solely or mainly 
of gold must find its prices vary with changes in the gold supply. 
But the time required for any measurable effect on prices may be 
long ; and while the long-drawn-out process is in course of opera- 
tion, anv number of other factors may also come into operation,