GREAT BRITAIN, II 
261 
directly concerned nothing more than remittances in terms of 
money, lead almost at once to transfers of goods. The movement 
of exports and imports — the substantive course of international 
trade — responds with surprising promptness to the balance of 
international payments as a whole. The promptness is surprising 
because each constituent transaction, to repeat, is purely in terms 
of money. When individuals in a country like Great Britain make 
loans to other individuals (or governments) abroad, they undertake 
to put at the disposal of the borrowers merely so much of purchas- 
ing power, so much “money.” Yet the recorded transactions 
between countries show surprisingly little transfer of the only 
“money” that moves from one to the other — gold. It is the 
goods that move, and they seem to move at once; almost as if 
there were an automatic connection between these financial oper- 
ations and the commodity exports or imports. That the flow of 
goods should ensue in time, perhaps even at an early date, is 
of course to be expected; it is a commonplace in the theoretical 
reasoning that this must be the ultimate outcome. What is 
puzzling is the rapidity, almost simultaneity, of the commodity 
movements. The presumable intermediate stage of gold flow and 
price changes is hard to discern, and certainly is extremely short. 
I find it impossible to see how there can be a complete skipping 
of the intermediate stage — anything in the nature of an auto- 
matic connection. There is, of course, the case, discussed at 
length in the preceding pages, where no intermediate stage is 
to be expected at all; the case, namely, where those who make 
loans happen to stipulate also that the proceeds shall be used 
to buy specified goods of their own or of their associates. But 
in the “normal” case, which is exemplified in Britain’s trade for 
the period just examined, purchases of goods are not thus tied to 
the loans; and it would then seem to be only some sort of rounda- 
bout process, some disturbance or readjustment of monetary and 
price conditions, that could lead to the movement of goods. Be- 
ing roundabout, one would suppose that it would take time. And 
yet it appears to require practically none. 
It is true that a searching examination of the presumable links