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

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Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Part II. Problems of verification

Collection:: Economics Books

INTERNATIONAL PAYMENTS 203 The relation is not unfailing; an element of the unpredictable remains. But, given a bank or a set of banks for which the ruling motive is the aim to secure the maximum profit, deposits will increase in the long run as reserves increase, and will decrease as reserves decrease. Let us now take up once again the matter of sensitiveness. It is connected, obviously, with that of domination; yet it raises some problems of its own. They can best be considered by clas- sifying countries according to the degree in which their monetary systems are sensitive. In some countries the conditions are (or have been) such that an inflow or outflow of specie might be expected to bring quick response in the banking and currency situation. In others the response is slow and uncertain. The classic instance of marked and continuing sensitiveness is that of Great Britain, as her monetary system stood in pre-war days, and again stood after the resumption of specie payments in 1924. With a great utilization of deposit banking and a towering mass of demand obligations in the form of deposits, the banks habitually carried in reserves, as the basis of it all, the bare mini- mum necessary for the recurrent daily demands for cash over the counter. IFor the banking system as a whole no increase of money available for reserve could take place except thru the importation of specie. The Bank of England was the one source to which a joint-stock bank (the ordinary bank) could turn for cash. Bank of England notes were virtually gold certificates, varying in amount with the amount of gold held by the Bank. The Bank's holdings of gold in turn fluctuated chiefly with the conditions of international payments — the foreign inflow or the foreign drain. The Bank then, according to the extent of its gold reserve, made it easy or hard for the ordinary banks to maintain or replenish their cash, using its rate of discount to them as the means of regulating loans, thereby deposits, thereby command of cash. Being chiefly a bankers’ bank, its discount rate to banks served to regulate the general discount market. The links of connection were close: gold inflow and outflow, bank discount rates, the loosening or restriction of loans and deposits, the temper and spirit of

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