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 FRANCO-GERMAN INDEMNITY OF 1871 275 how does the mechanism of international payments function under such an extraordinary strain? Adam Smith’s explanation was hardly satisfactory in his own day; certainly it cannot be so in ours. True, it had a plausibility for the 18th century, because then the same individual was likely to be both an exporter, an importer, and a dealer in foreign exchange. Differentiation in the conduct of these several phases of foreign business had barely begun; the “merchant” was likely to carry on all of them. And hence Adam Smith, casting about for an explanation, might readily conceive that the merchant, engaged in varied and interlocking transactions, would turn to the alternative of sending goods abroad to meet his bills, even tho this obviously would be a troublesome and risky matter, above all in times of war. That he should find a greater profit in doing this than in sending goods rather than specie is obviously inconsistent with Adam Smith’s own doctrine of the equality of profit in the employment of different capitals. But before quite ruling out Adam Smith’s explanation, one would wish to know more of the way in which things actually went in those days. Bookman tho he was, he was hungry for facts, and his version of what was taking place in his time is not likely to be entirely without foundation. None the less, it hardly tells the whole story even for the 18th century; and it certainly can tell us very little of what happened under such exigencies in later days. Ricardo and his contemporaries were confronted by the same problem." During the Napoleonic wars great subsidies were made to the Continental allies of England, and then also it became a question just how the subsidies reached the beneficiaries and just how they influenced the movement of specie or that of goods. But the Ricardian explanation, as sketched a moment ago, also cannot tell the whole story. The process which the Ricardians pictured is one which takes time. Here, as in almost all their rea- soning, they neglected the element of time, and assumed that the 1 For an account of those discussions, see the valuable paper by Professor N. J. Silberling in the Quarterly Journal of Economics, May, 1924, especially pp. 416 et seq

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