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

NORMAL EXCHANGES 227 The above account was intended to present in a concrete form a method of monetary reconstruction strictly based on the principle of the gold standard. It is, moreover, a system which should be compatible with bimetallism, if the latter were universally adopted. Whatever may be the detailed methods employed, monetary reconstruction pre- supposes a return to the convertibility of the internal currency either by means of a stock of gold or of foreign bills, or with the help of external credits. At the time of writing, when monetary problems not only form the occasion for some fine intellectual fireworks but when the economic, social and therefore also the political life of so many countries is bound up with their solution, the author considers it his duty to draw the atten- tion of his readers to the practical conclusions which he had thought it possible to form in the present state of the science of economics. And some of those readers will perhaps recognise the importance of erecting practical schemes on the basis of a theory which has been somewhat renovated. For so long as we cling to those superficial propositions which reduce all monetary problems and their solutions to notions of quantity, it is difficult to see any issue to our present difficulties except in a policy of deflation. It is thought that deflation will bring about a progressive im- provement in the exchange and that the exchange will be stabilised by the mere abolition of forced currency and system of the gold standard. Nevertheless, while it is difficult to force exporters to hand over all the bills which represent their sales abroad, so long as they are afraid of a drop in the exchange and therefore desire to pile up a reserve abroad, it is easy to obtain foreign currencies when confidence returns and the exchange is stabilised. This happened in Czechoslovakia, where the central institute of foreign exchange at Prague was of assistance in bringing about monetary reconstruction. 1 It is easy to see that a policy of “intervention on the exchange market” with the help of a stock of foreign bills or of a foreign credit quite naturally ends in a régime of convertibility whenever the intervening organisation is in a position to buy up all the surplus drafts or to sell all the surplus foreign valuta at an equally constant rate. This is what happened in Czechoslovakia.

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