International trade

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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

THE FOREIGN EXCHANGES 219 “active” securities, and of the international securities among them; just as they tend, by increasing the carrying charges, to lower the price of exchange on foreign countries. An inflow of gold, which might be expected to take place toward the country of tight money, is replaced by an outward movement of securities. That movement of securities in itself tends to lessen the differences between the two money markets, both as regards security prices and interest rates, and so tends to lessen the immediate pressure toward a movement of gold. These short-time transfers of securities from one market to an- other are not unrelated to the international investment operations, that is, the loans and interest payments whose more permanent effects have already been analyzed and will engage our attention further as we proceed. International loans take place thru the sale of securities which soon have an international market. Tho at the outset the effect of the loan is to cause a remittance in one direction only — from the lending country to the borrowing, from the country that has sold the bonds to the country which has bought them — the bonds or stocks at an early date come to be bought and sold in the financial market of both. They are likely to drift to and fro under the influence of the general condi- tions of trade and of the money market. Underneath this drift there remain the deeper currents. On the whole, securities are sold by the borrowing country during the earlier stage of its inter- national investment operations, and move toward the lending country. And on the whole, when the borrowing country has grown to economic maturity, it tends to buy back its securities; a movement the other way sets in. The several flows intermingle, and at any given time it may not be easy to discern which is domi- nant — the more noticeable, which is impelled by the money markets of the moment, or the less conspicuous undercurrent which depends on the trend of investment. The effects of the movement of securities are by no means always of the moderating and offsetting kind. A financial collapse, or a marked depression, in one financial market may cause securities to move thence to another, and so introduce a new substantive

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