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

NORMAL EXCHANGES 217 vation. In such circumstances it is useless, even when the internal circulation has been reduced or stabilised, to count on exchange fluctuations to restore the balance of pay- ments or on a restoration of the balance of payments to bring the exchange back into equilibrium. Indeed in so far as it is at all permissible to speak of an equilibrium in international trade,! the main factor in bring- ing about equilibrium will be found at the present day in the movement of capital. Such movements, due to international loans, have made it possible since the end of the 19th century to bring the balance of payments of poor countries into equilibrium and to restore their monetary systems. On the other hand, it is the movements of the rate of discount, carefully regu- lated by the great banks of issue, which by attracting the available capital from abroad have made it possible for large trading countries to reduce their export of gold to a minimum by conveniently counteracting any surplus of debts which have fallen due. It 1s well known that this discount policy, effective as it is to meet any temporary deficit in the balance of pay- ments, is only possible with stable exchanges. For if the exchanges are irregular the risks involved by a double conversion both ways at different times of the sum trans- ferred would not make it profitable to effect such transfers in order to obtain the profit of a slight rise in interest. But whatever may be the influence attributed, rightly or wrongly, to fluctuations in the volume of currency due 1 For it should be pointed out that theoretical writers have been some- what precipitate in explaining a phenomenon the very existence of which has not been clearly established. Even during the period of comparative calm at the end of the 19th century we do not observe any general state of equilibrium in the balance of payments. On the contrary, we see a large number of countries receiving annually, in spite of new investments abroad which neutralise part of the payments due to them from foreign countries, specie payments in respect of a credit balance, whereas others continuously remain debtors. Among the latter the new countries which produce precious metals merely send back in the form of bullion the dividends of the European shareholders in their mines. Numerous others, on the other hand, fall a victim to chronic exchange crises and are reduced to perpetual external borrowing in order to bring their balance of payments into equilibrium. “J

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