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 III. International trade under inconvertible paper

Collection:: Economics Books

370 INTERNATIONAL TRADE rad EM Ra move both ways. As regards a paper country, to sell goods in it and so to have at one’s command bills of exchange on it, means only that purchasing power in the paper country becomes available ; nothing more. One can either sell the exchange, or (ordinarily the less convenient alternative) use the purchasing power in buying any goods of the paper country which one happens to want. The paper itself is worth nothing in any other way.! But the sale of goods to a silver country and the consequent possession of silver exchange mean that one can get a specified quantity of silver, a commodity which is readily vendible in any country. And similarly the purchase of goods from a silver country does not necessarily involve the purchase of exchange on that country as a means of effecting payment for the goods. Silver bullion can be bought in the open market and the silver itself transmitted. The converse is the case where goods move from a silver country to a gold country. The vendor who sends the goods from this silver country has command not merely of purchasing power in the gold country, but of gold itself; and for this as bullion he can always find a ready market in his own country or anywhere else. An alternative exists which is not present in the transactions between paper countries and gold countries; and the conditions on which the rate of exchange depends are more complex. We may take for illustration the trade between India and Great Britain — the Indian (rupee) exchange as it was between 1876 and 1893, that is, between the year in which the great fall in the price of silver began and that in which the Indian mints were closed to the coinage of rupees. The general trend of the trade with the Orient need not be rehearsed. It led to a flow of specie toward the Orient, both of gold and silver. The gold moved to the silver country (India) as a commodity. The silver moved more 1T bar from consideration the minor and negligible movement of paper to and fro in the pockets of travellers. I set aside also (as quite exceptional) substantial purchases of paper money by speculators in a foreign country. Such purchases played a large part in the extraordinary phenomena of the German currency debacle of 1921-23, and, like the other phenomena of that episode, stand outside the scope of the present analysis. Indeed the whole German episode stands outside the analysis of what may be regarded as the normal case of inconvertible paper issues — that in which they do not reach the stage of collapse.

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