Modern monetary systems

Bibliographic data

Monograph

Identifikator:: 1753210836

URN:: urn:nbn:de:zbw-retromon-128414

Document type:: Monograph

Author:: Nogaro, Bertrand http://d-nb.info/gnd/117039713

Title:: Modern monetary systems

Place of publication:: London

Publisher:: King

Year of publication:: 1927

Scope:: XII, 236 S.

Digitisation:: 2021

Collection:: Economics Books

Usage license:: Get license information via the feedback formular.

Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Part III. Monetary theory and its application in practice

Collection:: Economics Books

NORMAL EXCHANGES 20% 10 be effected. On the other hand, it permits of debts and credits being set off against each other in so far as they balance, when for one reason or another the currency which is available on one of the two markets is not accepted on the other. The rate of exchange, viz., the rate at which the negotiation takes place, can iz the first case only vary within the limits corresponding to the cost of transporting bullion. In the second case it fluctuates outside any limits, It is clear, therefore, that the phenomenon of exchange shown by variations in the cost of transporting a given sum of money between two markets only arises when there is no method of settlement which is more economical and capable of being carried out at a fixed cost. Thus, for instance, there was at one time a rate of exchange as between Lyons and Paris as well as between Paris and Brussels in order to avoid the difficulty and expense of transporting bullion backwards and forwards between these two towns. The Bank of France, which offers its services free or in return for an insignificant and fixed remuneration, nowadays makes it unnecessary to resort to the process of exchange between the first two towns, and the Bank does not thereby appear to have violated the “natural laws” of economic life. It is easy to conceive, however, that the same system might work as between Paris and Brussels or between Paris and Rome or Madrid, if a common bank of issue extended all its operations over all these markets; and it does not require a violent stretch of the imagination to see an international bank of issue at work as the successor to the various national banks of issue, substituting for the various national notes a single fiduciary currency and having the task of effecting all the world over payments as between one market and another similar to those carried out at the present day within the limits of a great nation. It is true, of course, that such a scheme may be utopian for political reasons ; we only wish to emphasise here that it is €asy to imagine. It is obvious that the exchange, which is an economical method of settlement but of varying cost, and is based on a mechanism of clearing, is not necessarily international in

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