International trade

Bibliographic data

Monograph

Identifikator:: 1758394757

URN:: urn:nbn:de:zbw-retromon-136209

Document type:: Monograph

Author:: Taussig, Frank William http://d-nb.info/gnd/120199459

Title:: International trade

Place of publication:: New York, NY

Publisher:: Macmillan

Year of publication:: 1927

Scope:: XXI, 425 Seiten; graph. Darst.

Digitisation:: 2021

Collection:: Economics Books

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

Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Part I. Theory

Collection:: Economics Books

LOANS AND INTEREST PAYMENTS 127 such as to involve at the outset nothing more than the obligation to put funds at the disposal of the borrowers; while the borrowers themselves transferred these funds, except for the possible use of some fraction forthwith in the lending country, to their own country. All in all, we are justified in treating this as the normal and ordinary course of events. International loans disturb the existing balance of payments; remittances are made to the borrow- ing country ; specie flows thence from the lending country. The further course which events may then be expected to take is sufficiently familiar, and need not again be analyzed in detail. The loan being made (in our assumed case) by British to Ameri- cans, prices and incomes fall in Great Britain, rise in the United States. An excess of exports develops in Great Britain; not immediately, but by a gradual process. She comes to have a “favorable” balance of trade. In the United States an excess of imports gradually appears — an “ unfavorable ” balance of trade. The people of Great Britain send merchandise to the United States, and add to the tangible equipment of the Americans, or to their consumable goods, giving up for the time being some of their own possessions and adding to those of the Americans. But not only do they give up something in this way — make a sacrifice, incur a loss, for the time being — but they incur a further loss in that the barter terms of trade become less advantageous to them. The imports which they continue to buy from the United States are got on less favorable terms than before. Conversely, the people of the United States have a double gain; not only do they get an extra supply of imported goods, but all the imports, the goods plainly and simply bartered as well as the extra goods that represent the loans, are got on better terms than before. The ulterior consequences on the barter terms of trade, let it be repeated, will not appear so far as the borrowers make direct purchases of goods in the lenders’ country. And if the borrowed funds are used in foto for such purchases, the ulterior effect will not ensue at all. If part is so used, the effects will be mitigated. The actuating machinery for these effects is the flow of specie, which is eliminated so far as there are the direct purchases.

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