214 
INTERNATIONAL TRADE 
from being transmitted to the ordinary banks and the general 
trade of the country. Conversely, an outflow may simply diminish 
the store held by them, again leaving the country at large undis- 
turbed. And yet everything depends on the way in which the 
enormous store is handled. The system may be so administered 
as to render banking operations, credit adjustments, the trend of 
prices, closely dependent on the volume and the movement of the 
central reserve, and thereby on the imports and exports of specie; 
or it may make the dependence remote and uncertain. 
At the time of the adoption of the system something like the 
European practice of pre-war days was probably contemplated : 
a normal reserve well above the minimum ; not much attention to 
minor movements of the reserve, whether up or down, and these not 
allowed to impinge on the general credit structure; none the less, 
defense of the reserve, thru discount rates, whenever considerable 
and continuing drains set in; and, conversely, ready release from 
the reserve for seasonal or temporary remittances, indeed for very 
considerable outflow when the remittances swelled to dimensions 
much above the normal. But the establishment of any settled 
policy, the development of any traditions, was impossible either 
during the Great War or in the years immediately succeeding. 
I shall point out in a subsequent chapter! how anomalous was the 
character of the international trade of the United States during 
and after the war, and how different were the occurrences from 
anything contemplated in the theoretic analysis of the ordinary 
or “normal” conditions. It isenough here to note that the Federal 
Reserve System was designed to have a smoothed and moderated 
sensitiveness; one in which the movements of gold from country 
to country would be made smoother and less abrupt than in earlier 
days, and subject to some deliberate and methodical regulation ; 
yet not in the end with effects different from those contemplated 
in pre-war theory and practice. It would seem probable that in 
time — when the far-ramifying disturbances of the war are at 
last effaced — some such situation will emerge. But it would now 
(1926) be quite rash to predict. 
1 Chapter 25, pp. 307-334.