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French and Canadian Exchange Rate Policy

Published online by Cambridge University Press:  03 February 2011

Harry C. Eastman
Harry C. Eastman
Affiliation:
University of Toronto
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Extract

Whatever may have been the merits of the gold standard in die nineteenth century, it has not proved a satisfactory system of exchange since 1913. The decentralization of the world financial system, the greater liquidity of the public's holdings, and the appearance of capital movements unrelated to movements of trade have rendered abortive attempts to return permanently to the gold standard. In any event, the unwillingness of governments, increasingly dependent on the favor of the lower income groups, to allow or compel the contraction of domestic credit in response to changes in international demand prevented the operation of a system that depends on such adjustments. But the gold standard of die nineteendi century cast a long shadow behind it.

Type
Articles
Information
The Journal of Economic History , Volume 15 , Issue 4 , December 1955 , pp. 403 - 410
Copyright
Copyright © The Economic History Association 1955

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References

1 Brown, William Adams Jr, The Gold Standard Reinterpreted, 1914–1931 (New York: National Bureau for Economic Research, 1936), ch. 21Google Scholar.

2 Canada, Dominion Bureau of Statistics, The Canadian Balance of International Payments, 1946-1952.

3 Canada, Minister of Finance, Statement, September 30, 1950.

4 Dominion Bureau of Statistics, Balance of Payments, 1954.

5 The higher rate of interest in Canada than in the United States increased the attractiveness of the speculation.

6 The most influential offender in this regard is the League of Nations. The confusion in its analysis is illustrated in The Course and Control of Inflation (Geneva: League of Nations, 1946), pp. 43–47Google Scholar , where speculation that admittedly supported a rate above its future equilibrium level is nevertheless defined as “equilibrating.”

7 Dulles, E. L., The French Franc, 1914-1928 (New York: The Macmillan Co., 1929), p. 244.Google Scholar

8 Rapport du comité des experts (décret du 31 mai, 1926).

9 Keynes, J. M., Tract on Monetary Reform (London: Macmillan and Co., 1923), p. 70ff.Google Scholar

10 Y., “Le Marche monétaire et les changes,” Revue d'Economie Politiqtie, XLI, 1927, p. 370.Google Scholar

11 , Dulles, The French Franc, pp. 181–82.Google Scholar

12 Using end-of-month data for wholesale prices and for dollar exchange the proportion was .62 in the 1924 crisis and .53 in 1925-1926.

13 Eastman, Harry C. and Stykolt, S., “Exchange Stabilization in Canada, 1950-1954,” to appear in the Canadian Journal of Economics and Political Science.Google Scholar

14 Lachappelle, Georges, “La Trésorerie et le budget,” Revue d'Economie Politique, XLI, 1927, p. 292.Google Scholar