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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Document type:: Monograph

Structure type:: Chapter

Title:: Part I. Modern monetary systems and their operation

Collection:: Economics Books

50 MODERN MONETARY SYSTEMS An even more remarkable event was the prohibition, not only of the export, but also of the import of gold ; this had brought down the import gold point, and thus, when the Trade Balance was favourable, caused the national currency to rise above par. This was done in Sweden in 1916 at the request of the State Bank,! and seems to have been the first step of its kind deliberately taken in a country with a gold currency.? It should be observed, however, that the prohibition to the export gold in one of two countries, between which an exchange rate is quoted, is equivalent to an import prohibition in the other from the point of view of the exchange rate between the two countries. Hence this measure remained without effect except in a few countries such as Holland, where the export of gold was still permitted.® But in the end it divorced the national cur- rencies involved from all others, even from those on a gold basis.? certain cvienies, 7.0 the Dutch florin, had already occurred before the entry of the United States into the war. 1 Mr. Cassel points out in his “Money and Foreign Exchange after 1914” (English translation, Constable 1922, p. 79) the rather petty reasons which were put forward by the Riksbank. He did, however, agree to this step being taken on the ground that the stock of gold was likely to arrest the rise in prices—a result which would seem likely to occur, in any case, because foreign goods would be bought more cheaply owing to a more favourable rate of exchange. 2 Tt should, however, be pointed out that Brazil, by limiting the amount of gold which the Conversion Office was entitled to receive, had really taken a similar step, which enabled the exchange to rise above the parity of 15d. fixed in 1906. Among countries with a silver currency, French Indo- China applied the same system; for it has a silver currency, but without free coinage and without allowing foreign coin to enter. See, on this subject, the authors “Probleme monétaire dans I’Indo-Chine francaise ” (Rev. Econ. Internationale, April 1921), and M. Oualid, “Le privilege de la Banque d’Indo-Chine et la question des Banques coloniales,” p. 124. The Swedish example was followed by other countries; from 1917 onwards Spain only accepted American gold at a rate below par. 3 The Bank of Holland, which was not obliged to allow the export of gold, nevertheless made such payments as it thought necessary, and had some difficulty in inducing the Bank of Sweden to accept Dutch gold in respect of justifiable payments at the mint par of 2'480 crowns per kilogram of fine metal. 4 See infra, Part II, Ch. II, on the theoretical implications of this

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