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

THE GOLD EXCHANGE STANDARD 381 Essentially the same situation exists if the established exchange rate be quite different from what it would be under specie — if it be one adjusted to a currency which had been overissued. The currency is to be stabilized in terms of gold, even tho there is no return to specie payments. The equivalent of the currency to the gold money of another country (the pound sterling or the dollar) is fixed at a rate corresponding to the existing depreciation. At the rate fixed on this basis, the rates of exchange are to be held. Asin the case just considered, a central bank is put in charge, or a government department of analogous character. There a stock of bills on foreign countries and especially on gold-standard countries is to be kept on hand ; there bills are bought and sold at the fixed rate, and more particularly are available for those who have pay- ments to make abroad. Fluctuations in exchange may go on, but they are of a minor sort, kept within a narrow range. Such minor fluctuations, combined with changes in discount rates, are expected to suffice for bringing about a balance of the international debits or credits. It is beyond the scope of this book to consider the difficult ques- tions of monetary theory and experience which are raised by the gold exchange plan. I will confine my comments to a brief notation, in the nature of a recapitulation, on certain fundamental points. Obviously, as in the case of temporary pegging, so in that of the permanent gold exchange standard, the maintenance of the fixed rate is made the more secure if the government has large resources and is determined to use them freely. Bills on foreign countries can be bought, impounded as a reserve, and sold when called for. Additional bills can be got in a pinch by borrowing abroad; arranging, for example, with foreign correspondents that bills shall be met whenever drawn. Seasonal variations in the exchanges can be readily smoothed over, much in the same way as they are smoothed, without deliberate intent, in the ordinary course of dealers’ transactions under the plain and simple gold exchanges. Fluctuations and oscillations over longer periods, too, can be taken care of. The effects of crop changes, often momentous for the sea- son, can spread over time; and in time, with careful nursing, can

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