Modern monetary systems

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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

224 MODERN MONETARY SYSTEMS for gold shipments the purchase and sale of foreign bills payable in gold at rates corresponding to the gold points themselves, such bills being purchased at par, less the cost of transporting gold, and being sold at par plus this cost. This difference is entirely justified by the economy effected in avoiding the actual transport of bullion. As is customary in countries with a gold exchange standard, a difference corresponding to the gold points is allowed to subsist be- tween the selling price of bills held by the Office and the purchase price of bills offered by private individuals. The rate of exchange will continue to vary within limits approxi- mately the same as those of the gold points and will thus afford useful information as to the state of the balance of payments at any given moment.! Moreover, there would seem to be no objection to the National Exchange Offices being authorised to establish branches in foreign markets with a view to facilitating arbitration, subject only to their activities being regulated in agreement with the inter- national Credit Institute. This being said, it would probably be desirable to re- place, in countries where the currency is at present highly depreciated, the present circulation by a new one. This new circulation would be much reduced and would be based on a monetary unit convertible abroad by the method described above. In other countries it would be enough to make an agree- ment between the International Institute and the National Office fixing a parity corresponding approximately to the average exchange rate during the period preceding stabi- lisation. This method appears to be necessary in order not to provoke economic disturbances which would in the first place affect exporting industries. Such industries would 1 The purchase and selling prices of bills in most countries with a gold exchange standard have been fixed in this way, after taking into account the cost of transporting gold, 7.e., the effective gold points. In accordance with the suggestion made at Genoa it might even be possible to allow for a rather larger difference between the purchase price and the selling price of bills and so allow the exchange to fluctuate a little more widely in order that any signs of a possible disequilibrium in the trade balance may emerge more distinctly.

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