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

Usage license:: Get license information via the feedback formular.

Chapter

Document type:: Monograph

Structure type:: Chapter

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

Collection:: Economics Books

56 MODERN MONETARY SYSTEMS experienced in obtaining foreign credits. She was obliged to support Austria, Bulgaria and Turkey, but was far from having at her disposal, like France and England, enormous quantities of foreign securities.! ‘The United States failed her just at the moment when the American Treasury opened unlimited credits to her new Allies, whose financial resources were beginning to fail. It is true that with her powerful industry and the raw materials which she obtained in Central Europe, Germany was in a position to provide amply for the wants of herself and her Allies in war supplies, without becoming too dependent on neutral markets. Nevertheless she experi- enced great difficulty in paying for her imports, and the credits opened in her favour by her smaller neighbours were not adequate to her needs. She therefore made every effort to support her currency, not only by reducing im- ports to a minimum and prohibiting the transfer of capital abroad, but also by putting to the best use such stocks of foreign currencies as she possessed. By an ordinance of January 28th, 1916, supplemented by another of February oth, 1917, a Central Foreign Exchange Office (Devisen- zentrale) was set up to which foreign bills were to be handed over, and to which all those who wished to obtain direct or indirect media of exchange were to apply. All orders for the purchase or sale of foreign exchange were to be sent through one or other of the twenty-six banks which were admitted to form part of the Office. The Foreign Exchange Office thus enjoyed a com- pulsory monopoly of exchange and was therefore in a position to peg the rate more or less arbitrarily ; for it could buy up all the available exchange, and thereupon distribute it without being obliged to adapt the rate, which it fixed itself, to the ratio between supply and de- mand. The rates of the mark to the florin or of the mark 1 An estimate commonly accepted places Germany’s pre-war holding of foreign securities at about 25 milliard marks; but as a large proportion could not be used, being in enemy hands, Germany had barely one-third of this sum at her disposal and, even so, only took belated measures to mobilise her securities.

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