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

226 MODERN MONETARY SYSTEMS of prices in internal currency and of the volume of internal currency. But if an attempt is to be made to raise the parity by successive stages, e.g., every year or every two years, the normal procedure would be that this process should be accompanied by a contraction of the currency. In any case recourse to irregular issue of notes must be stopped once for all as being incompatible with sound budgetary prin- ciples which by common consent must be observed if the first condition for obtaining a credit destined to restore and stabilise the exchange is to be fulfilled. On the other hand, we have seen that it is necessary for the National Exchange Office to be empowered to pur- chase private bills and therefore to re-sell them in order that the process of stabilisation may work both ways. But this does not mean that all foreign bills must necessarily be centralised there. In countries where financial as well as commercial transactions of an international character follow their normal course the Central Office will, if necessary, supply the required media of exchange out of its gold or gold credit reserve in the same way in which, before the war, the Banks of Issue of large trading countries did so (thus fixing the gold points) without it being necessary to restrict the liberty of private trans- actions in the slightest degree.! 1 The compulsory centralisation of foreign valuta may of course be considered to be a pre-requisite of monetary reconstruction in countries which are without the stock of gold required for external payments, and are also unable to obtain external credits sufficient to provide drafts for meeting temporary deficits in the balance of payments. It is conceivable that in these circumstances the centralisation of all foreign exchange might enable foreign bills to be bought and sold at a fixed rate, subject only to proof that the bills sold are intended to meet payments for justifiable imports. Probably this method would not prevent the creation of other exchange markets with somewhat different rates; but it would at least prevent an increase in the price of such imports as are considered necessary beyond the limit corresponding to the value of exports. This is more or less the system which has worked in the belligerent countries of Central Europe, and particularly in Germany, during the period of hostilities. But itis a high-handed method, difficult to apply; on the other hand, the system of the gold exchange standard described above is as liberal as the former

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