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 III. International trade under inconvertible paper

Collection:: Economics Books

SPECULATION 375 informed and cool. Their operations, as has already been said, exercise a stabilizing and smoothing influence. In the case of paper exchanges, the situation is very different. The fluctuations may be great, often are rapid, often are difficult to foresee. The very circumstance that they are great and unpre- dictable brings in an element by which these irregularities are accentuated : speculation by the “outside public.” Even the best informed and most experienced of dealers often do not know what the rates of exchange are likely to be in the future, and find themselves buying and selling from day to day more or less blindly. Side by side with them come the non-professional buyers and sellers, the “speculators” in the narrower sense. Foreign exchange being a standardized article, like wheat or cotton or securities, it can be bought or sold on a large scale by any one. Given this possibility, and given also large and rapid changes in price, persons of all sorts and kinds make their way into the market- place. Whereas with gold exchanges the margin of profit on any one transaction is small, and a large total gain can be got only thru a great volume of business spread over a considerable time, under paper there is the chance of quick turns and big profits from a few transactions, even from a single one. Chances of this kind, leading as they do to speculation by all sorts and conditions of men, lead also to manipulation, pools, rumors and lies — the familiar phenomena of a gamblers’ market. Whether speculation under such conditions serves to lessen fluctuations is no more clear as regards paper exchange than it is in the analogous cases of cotton, wheat, stocks. As regards gold exchange, speculative purchases and sales doubtless operate to lessen the rapidity and the range of the fluctuations. But where ““the public” takes part, as in these other cases, the rapidity of Auctuations is probably made greater by speculation; the ups and downs are more frequent, and they are more abrupt. It may be, however, that their range is made less rather than greater. So good observers have been led to believe, and have been led to con- clude that in this regard the outcome of wide-spread speculative dealings is on the whole good. But one should not be unduly

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