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

PEGGING 379 aside, less if trade is in its usual grooves. During the Great War governments were lavish in their expenditure for pegging, as they were for others, and in this direction as in others their operations often were not only recklessly extravagant, but of negligible effect for the military objects which were supposed to be promoted. But they did serve to peg the rates for long periods. The success in attaining this immediate object was made com- paratively easy because the ordinary course of international trade was itself profoundly disturbed, and the ordinary transactions greatly restricted. The reflex influence which pegging exercises on merchandise movements, and on all international transac- tions, was impeded or even completely obviated. In time of peace, however, and under normal commercial condi- tions, that reflex influence becomes strong, and in the end may bring the pegger’s efforts to naught, unless indeed he has succeeded in adjusting his set rate to the figure which would prevail on the whole without his interposition. Both the imports and exports of goods will necessarily be affected if he tries to keep the rate at a different figure. Exports will be stimulated if the rate is set high as compared with current prices of exportable goods; or (the more common case) imports will be stimulated if it is set low as compared with the current prices of imported goods. The oreater the discrepancies, the more strain will be put on the resources of the pegger. Similar is the situation with the invisible items. These two will respond to stimulus or discouragement, as the case may be. It is true that the invisible items, and especially the sales and purchases of securities, lending or borrowing operations of all kinds, are subject to influences of their own. For short periods, and indeed for periods of considerable length — not only for months, but for a year or two — they are themselves affected by the rate. Short- time loans by financial houses, loans by governments themselves, may be made more or less easy of negotiation by the state of the exchanges; and the very negotiation of loans then has its effect on the demand and supply of bills and so on the maintenance of the pegger’s figure. In this way pegging may long be successful in

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