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

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Chapter

Document type:: Monograph

Structure type:: Chapter

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

Collection:: Economics Books

212 MODERN MONETARY SYSTEMS circumstances prevalent during the war. The conversion office in Brazil, it has been said, ceased to function after 1914; the same is true of the office in Argentina at a later date; finally the gold exchange standard has been shaken even in India. But this observation is subject to a certain number of serious qualifications which deprive it of its significance. In the first place the conversion office in Brazil was not set up in such a way as to ensure the regular working of the system of the gold reserve; for on the one hand it did not make the entire internal circulation con- vertible in general, but only the notes issued by itself. Again, it was only authorised to accept gold from abroad in limited quantities; and this restriction had the double effect of eliminating the import gold point—as in fact happened in practice—during periods when the balance of payments showed a large surplus and of preventing the conversion office from constituting a gold reserve sufficient to meet requirements during periods when the balance of payments was in deficit. As regards the Argentine, the conversion office, after having kept the exchanges per- fectly regular from the end of 1904 up to 1914, Was no longer required after the beginning of the period of hostilities (law of September 30th, 1914) to guarantee the convertibility of notes into gold. Nevertheless the Argen- tine exchange was well kept up until the end of the period of hostilities. It was not till after this date that the rate of 1 M. Décamps has pointed out (op. cit., p. 177), as a definite proof of instability, the rise in the Argentine exchange to 533d. in 1917; but it should be observed that at that time it was the pound which was fluctuating in relation to gold and not the Argentine peso. In the middle of 1919 we still find the peso at 51d. (the normal parity being 47°6d.); but this rate is near the normal parity in relation to the United States dollar. On the other hand, M. Décamps observes (0p. ¢it., p. 172) that without the conversion office the Argentine exchange might have risen to somewhere near its previous parity during the years in which the balance of payments was peculiarly favourable. This may be true, but the parity was not less arbitrary than the new parity and, as the return to the former parity had been rejected for economic reasons, it is impossible to find here any serious argument in favour of an unstable exchange—the only régime which could in practice have been substituted for that of the conversion office.

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