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 II. Problems of verification

Collection:: Economics Books

INTERNATIONAL PAYMENTS 205 become larger than needed for the every-day calls. The reserves both of the ordinary banks and of the Bank of England itself become comparatively abundant; conditions which do not indeed lead automatically to larger bank loans and larger deposits, but which make expansion easy at a subsequent stage, when general trade conditions and the temper of the business community rise to the possibilities, as sooner or later they will hardly fail to do. A somewhat different case, yet one in which the degree of sen- sitiveness is at least equally great, appears in Canada. It deserves attention because the experiences of Canada will be found in the sequel to be peculiarly instructive as regards some problems of verification. The essentials of the banking system of Canada can be stated in a few words.! A small number of banks, most of them having individually large capital, large business, and many branches; a wide use of deposit banking; and, most significant for the present purpose, legal tender money partly gold, but mainly government paper issued on a plan virtually like that of Bank of England notes, and therefore dependent for its flexibility on an increase or decrease of the gold held against it by the government. The physical gold money is almost all in government vaults, the banks themselves using the government notes both as reserve and in counter pay- ments. So far the system is very like the British. The Canadian system differs from the British, however, in one important respect. The banks can issue notes, not indeed quite without limit (no bank may have notes in excess of capital), but with sufficient freedom to enable them to meet the daily demands for large change at their counters. Hence the particular kind of limitation on bank expansion which has just been described for Great Britain does not exist in Canada. Banking reserves and banking operations are not affected (virtually not) by any inter- nal drain of gold. It is only an international movement which brings pressure on them. The situation as a whole presents the 1 T refer to the Canadian system as it stood before the Great War, and as it stood again when the effects of the war had cleared away; neglecting, that is, the inter- vening period when there was not convertibility into gold.

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