204 MODERN MONETARY SYSTEMS 
problems the solution of which is of the greatest import- 
ance for the destiny of nations, especially at the moment of 
emerging from a crisis such as the world has just experi- 
enced. Itis also one of those economic problems the solu- 
tion of which modern theory may help forward by contri- 
buting some scientific data. 
It is important, therefore, to define what such data are 
and in the first place to throw overboard certain prejudices 
which arise from a misunderstanding of the very idea of 
stability, The phenomenon of the exchange, when we 
consider it together with all the complex of actions and 
reactions which accompany it, fills such a large place 
among the facts which lie within the field of an economist’s 
observation that certain economists consider it as a neces- 
sary phenomenon and call it “natural,” as though it were 
one which it is not within our power to prevent, even in an 
extreme form; they assume that it is the result of a whole 
complex of circumstances due to the unconscious action 
rather than to the deliberate will of man, and that it has the 
peculiar virtue of counteracting its own excesses but 
cannot be restrained by public authority, except perhaps 
by an indirect and slow influence over the numerous factors 
which determine it. 
We have already seen from numerous examples that it 
would be too optimistic to rely on the regularising factors 
which emerge from a study of exchanges to the extent of 
assuming that the very fluctuations of the exchange are 
always effective as a regulating agency. On the other hand 
we have observed that a policy of regulating the exchanges 
deliberately and over long periods has been successful in 
various countries. But our analysis of the problem must 
go much further. 
Coming back, therefore, to the elementary mechanism 
of the exchange as we have come to know it in actual 
business or in reading technical works, we observe that 
it is essentially a process of clearing as between two 
markets, which is effected by means of the negotiation of 
bills of exchange. The object of this method is simply zo 
avoid the transport of bullion or specie whenever a payment has