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

376 INTERNATIONAL TRADE ‘optimistic about any one of the highly-organized and highly- speculative markets. It is not clear that incessant and feverish buying and selling, whether by financial magnates or by the riff- raft of the business world, has a benign and smoothing influence. As regards paper exchange, the question for the present inquiry is on the relation between the speculative fluctuations and the underlying forces which in the end determine the rates around which they move. Here some distinctions must be made. The underlying forces may operate in sudden and almost spectacular, ways, or they may operate slowly and inconspicuously. Under conditions of the first kind, speculation will be rampant, and fluctuations will be large, irregular, and rapid. Under those of the second, the rates are more likely to shift gradually, the outside public is not likely to be attracted by spasmodic ups and downs, and. the action of the professional dealers is more likely to have an evening and moderating effect such as it has under gold exchanges. A moderated situation may be expected, for example, if there is merely a change in commodity demand. Such a change usually sets: in, as has been noted above, by gradual and inconspicuous stages. Suppose that the British demand for American exports becomes greater. The first trace of the effects is that the brokers find exchange on London more plentiful than before in New York. Dollar exchange tends to stiffen. The brokers themselves, and the speculative fraternity generally, may think that this is but a flurry, and they will readily sell exchange short, at some advance over the previous price. The additional supply of exchange which must be in the end provided to meet the short sales will come with- out strain for a while, merely by taking up the slack which usually exists in the available supplies, or by arrangements with London correspondents for meeting the bills for the time being. Gradually it will appear that there is more than a flurry; more American goods are being steadily bought in Great Britain, and more sterling bills are being steadily offered on the market. The underlying situation emerges. The impact of the continuing new offerings makes itself felt on the market rate, and a new rate of exchange becomes established gradually and (perhaps) smoothly.

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