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 I. Modern monetary systems and their operation

Collection:: Economics Books

THE MONETARY CRISIS 53 credit of 200 million pesos was opened in 1918 by the Argentine, and one of 350 million pesetas by Spain. With this assistance, the exchanges of the Allies, after having fluctuated in the first two years as we have shown, soon became stable in relation to each other and to the United States dollar. “The London Exchange in New York was pegged in the autumn of 1915 and the peg was kept in until March 1919. The mechanism by which this was brought about was the appointment by the British Government of fiscal agents in New York—]. P. Morgan and Co.—with authority to buy all exchange offered on London at 47635. Morgan and Co. had large credits, some of which the British Government established by the negotiation of loans and the sale of American securities before the United States went into the war, and others which the United States Treasury subsequently placed at the dis- posal of the British Government.” The French Government followed a similar course. It made use of credits opened by the Treasuries of the United States and Great Britain to supply the Bank of France with drafts placed by the latter at the disposal of certain privileged classes of importers, the remainder being used to influence the open market. Thus from 1917 there came to be two rates of exchange, the official rate fixed by the Bank and the market rate.2 But owing to the Bank’s action the two rates were not widely different, and the French exchange may be said to have been more or less stabilised in the last phase of the war by a sufficiency of foreign credit and an adequate machinery for conver- sion. With resources adequate to its needs, the Bank of France pursued a steady but not too rigid policy of 1 Currencies after the War, published by the Secretariat of the League of Nations, London 1920, p. 188. From the first half of April 1917 onwards Congress authorised advances to the Allies up to a total of 3 milliard dollars. This assistance was all the more timely as private credits were on the point of exhaustion. 2 This twofold action is explained by the necessity of supporting the exchange as a whole without giving the free market the benefit of unlimited sums at a fixed rate of exchange for payments which in war-time might have lacked justification.

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