260 
INTERNATIONAL, TRADE 
Pe 
PE 
gy 
may be fairly said to give one. There the verification of theory is 
almost conclusive. The British situation, however, was more 
complex than the Canadian. The specie movements, for one 
thing, had quite a different character. Gold was steadily flowing 
into Great Britain from the mines, and steadily flowing out to 
other countries. The South African gold — much the largest 
constituent in the rapidly accruing output — went first to London, 
and thence filtered out in irregular streams to other countries. 
Both imports and exports of gold were almost continuous, and 
represented in the last analysis nothing more than the process of 
distributing the new supplies over the world at large. None the 
less, each individual movement was determined proximately in the 
same way as if there had been no new gold at all — by the Bank of 
England’s position, its reserve, its rate of discount, its relation to 
the British banks at large, the price of foreign exchange, the 
imports and exports of goods. To trace the connections between 
these monetary elements and the general problems considered in 
preceding chapters is a task which I have not found it practicable 
to carry out. It would be necessary to follow step by step the 
flow of gold into the country and out of it; the Bank’s reserve 
holdings and discount policy; the reserves, the interest rates, 
the loan operations and the deposits of the commercial banks; 
the details of the price changes —in fact, the working of the 
entire banking and monetary mechanism. Not least, the flow of 
commodity imports and exports would have to be followed in de- 
tail. Such an inquiry might well yield results of significance not 
only for the problems of international trade, but for those of 
money and credit as well. In this matter, as in so many others, 
economic science needs much laborious and skilled statistical 
research for its enrichment and advancement. 
One thing, however, stands out in the British phenomena. This 
is the unmistakably close connection between international pay- 
ments and the movements of commodity imports and exports. 
And this closeness of connection, striking in the case of Great 
Britain, is found again and again in other countries also.” Inter- 
national payments, tho they involve between the individuals