If the money of either country is fluctuating in value, relative to the
other, to any great extent, it may introduce some uncertainty that
will hamper and inconvenience trade,--though to a less extent than a
variable money would in its own country, as there are means by which
such fluctuations can be guarded against; but unless the changes are
sudden and violent, no inconvenience will be experienced, as the actual
exchange rates are more or less always fluctuating.
In support of these statements, and as showing that they are borne
out by practical experience, the following quotations are given from
Mr. Wells' "Recent Economic Changes," in reference to trade between a
silver and a gold standard country when the relative values of the two
metals were changing quite rapidly. He says, p. 239:--
"Mr. Lord, a director of the Manchester (England) Chamber of Commerce,
testified before the Commission on the Depression of Trade, in 1886,
that 'So far as India was concerned, it is not necessary to run
any risk at all from the uncertainties of exchange.' Mr. Blythell
(representing the Bombay Chamber of Commerce) testified before the same
commission, ... 'There is no difficulty in negotiating any transaction
for shipping goods to India and in securing exchange.'"
Mr. Wells says: "Thus from returns officially presented to the British
Gold and Silver Commission, 1886, it was established that the trade
of Great Britain with India since 1874 had relatively grown faster
than with any foreign country 'except the United States and perhaps
Holland.'" He also says, of Mexican exchange, p. 241: "The fluctuations
in the price of silver since 1873--Mexican exchange having varied in
New York in recent years from 114 to 140--would seem, necessarily, to
have been a disturbing factor of no little importance in the trade
between United States and Mexico; but the official statistics of the
trade between the two countries since 1873 (notoriously undervalued)
fail to show that any serious interruption has occurred."
During this period, Mexico had a silver standard, while the United
States had inconvertible paper for nearly six years of it, and a gold
standard for the remaining period.
Mr. Wells further states:--
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