INTERNATIONAL PAYMENTS 211

holdings of the metal, coupled with its power to issue more or less
of notes as commercial transactions varied, enabled it to maintain
its rate of discount at a singularly stable level. And that stability
was a matter of deliberate policy. The dominant place of the
Bank in the general credit and financial transactions of the country
 — its position as preéminently a bankers’ bank, buttressed
by its monopoly of note issue and its large “encaisse ” — enabled
it to impart stability not only to its banking policy but to the entire
monetary and credit structure of the country.
As regards sensitiveness, it thus appears that France was in a
situation by no means the same as that of Great Britain and the
other deposit-using countries. What with the large circulation
of actual gold, and the strong position and fixed policy of her great
Bank, there was sluggishness in the response to an international
movement of specie. True, that movement was watched with
interest and even with concern by the French financial community.
There was a steady disposition to influence it in the direction of
promoting the inflow of gold. But it was not allowed to impinge
quickly on discount rates, bank operations, bank credits. Nor
could any foreign gold movement serve to increase or decrease
effectively the total circulating medium, except over long periods
of time. As compared with the total gold in France — that in
circulation plus the Bank of France’s holdings — the import or
export of the metal in any one year, or over several years, was a
small matter.
No doubt, gold was the dominant factor in the French monetary
system. A steadily continuing increase or decrease of the country’s
 gold could not fail to have its effect on prices. Domination
thus there was, even tho not sensitiveness. But the situation
serves to bring into sharp relief a factor which Ricardo and his
followers habitually neglected — the element of time. Given
time, a country whose circulating medium consists solely or mainly
of gold must find its prices vary with changes in the gold supply.
But the time required for any measurable effect on prices may be
long ; and while the long-drawn-out process is in course of operation,
 anv number of other factors may also come into operation,