224 MODERN MONETARY SYSTEMS 
for gold shipments the purchase and sale of foreign bills 
payable in gold at rates corresponding to the gold points 
themselves, such bills being purchased at par, less the cost 
of transporting gold, and being sold at par plus this cost. 
This difference is entirely justified by the economy effected 
in avoiding the actual transport of bullion. As is customary 
in countries with a gold exchange standard, a difference 
corresponding to the gold points is allowed to subsist be- 
tween the selling price of bills held by the Office and the 
purchase price of bills offered by private individuals. The 
rate of exchange will continue to vary within limits approxi- 
mately the same as those of the gold points and will thus 
afford useful information as to the state of the balance of 
payments at any given moment.! Moreover, there would 
seem to be no objection to the National Exchange Offices 
being authorised to establish branches in foreign markets 
with a view to facilitating arbitration, subject only to their 
activities being regulated in agreement with the inter- 
national Credit Institute. 
This being said, it would probably be desirable to re- 
place, in countries where the currency is at present highly 
depreciated, the present circulation by a new one. This 
new circulation would be much reduced and would be 
based on a monetary unit convertible abroad by the 
method described above. 
In other countries it would be enough to make an agree- 
ment between the International Institute and the National 
Office fixing a parity corresponding approximately to the 
average exchange rate during the period preceding stabi- 
lisation. This method appears to be necessary in order not 
to provoke economic disturbances which would in the first 
place affect exporting industries. Such industries would 
1 The purchase and selling prices of bills in most countries with a gold 
exchange standard have been fixed in this way, after taking into account the 
cost of transporting gold, 7.e., the effective gold points. In accordance with 
the suggestion made at Genoa it might even be possible to allow for a 
rather larger difference between the purchase price and the selling price of 
bills and so allow the exchange to fluctuate a little more widely in order 
that any signs of a possible disequilibrium in the trade balance may emerge 
more distinctly.