46 MODERN MONETARY SYSTEMS 
playing the double 74/¢ of the Exchange Office at Manilla, 
which supplied drafts on New York at a fixed rate, and of 
the Conversion Office in the Argentine, which accepted 
and supplied gold for international payments. 
This last example finally demonstrates how, by a series 
of changes in method, the traditional gold-standard 7égime 
evolved into the more modern systems which secure for 
national fiduciary currencies stable exchanges based on 
gold, the standard and instrument for international pay- 
ments. 
§ 6. Results of Monetary Reforms. Stable Exchanges almost 
universally restored at the beginning of the 20th century 
on a gold basis. 
Thus during the last years of the 19th, and the opening 
years of the 20th century, most countries had successfully 
overcome the monetary difficulties which had resulted in 
the first place from putting fiduciary currencies into 
circulation, and, secondly, from the abolition of Bime- 
tallism and the disappearance of a fixed exchange ratio 
between gold and silver. 
The practice of contracting foreign loans, which had 
become very common at this time, had furthered a new 
distribution of the existing stocks of gold, whereas in 
many cases the adoption of the gold reserve system had 
enabled the countries concerned to put the small stocks 
of metal which they had at their disposal to the best use, 
and to place their exchanges on a gold basis. 
Under this system international monetary relations 
were likely to remain stable in normal times, or rather in 
times of peace, even in the event of a crisis. For any 
country having at its disposal an internal convertible 
currency, and machinery for conversion well established 
either by law or custom, could always restore equilibrium 
by means of a foreign loan if the Trade Balance showed a 
deficit over too long a period. New gold-producing 
1 The Austro-Hungarian Bank, by undertaking to collect the foreign 
loans, managed to meet its obligations even in times of difficulty.