Hostname: page-component-cd9895bd7-hc48f Total loading time: 0 Render date: 2024-12-25T05:29:30.945Z Has data issue: false hasContentIssue false

Political Conditions for International Currency Reform

Published online by Cambridge University Press:  22 May 2009

Get access

Extract

Recent schemes for international currency reform are unrealistic to the extent that they are derived as optimum solutions to economic problems alone. International currency arrangements are instances of international organization generally, and consequently fall within the scope of political sociology as much as—if not more than—of pure economics. Political complications must therefore not only be acknowledged, as they usually are, but analyzed as well, as they often are not. This essay represents an inquiry in that direction.

Type
Articles
Copyright
Copyright © The IO Foundation 1964

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

1 Kohn, Hans, The Idea of Nationalism (New York: Macmillan, 1961), p. 192 ff.Google Scholar.

2 Deutsch, Karl, Nationalism and Social Communication (New York: John Wiley & Sons, 1953), p. 17Google Scholar. See also, Deutsch, Karl, Political Community at the International Level (Garden City, N.Y.: Doubleday and Company, Inc., 1954)Google Scholar, and Deutsch, Karl and others, Political Community and the North Atlantic Area (Princeton, N.J.: Princeton University Press, 1957)Google Scholar. The latter resulted from a cooperative effort at Princeton University.

3 For the classic exposition of the logic behind this process, see Loesch, August, The Economics of Location (New Haven, Conn.: Yale University Press, 1954)Google Scholar.

4 Deutsch, , Political Community and the North Atlantic Area, p. 141Google Scholar.

5 See, for example, Robertson, D. H., Money (4th ed.; New York, 1948), p. 3Google Scholar.

6 Apparently bills of exchange predate coinage by several centuries. The earliest known bills are written on slate tablets from the Babylonian empire of the 21st century, B.C., while the first formal coinage is traceable to King Gyges of Lydia, 716–678 B.C. See Einzig, Paul, The History of Foreign Exchange (New York: St. Martin's Press, 1962)Google Scholar.

7 Ashton, T. S., “The Bill of Exchange and Private Banks in Lancashire, 1790–1830,” in Ashton, T. S. and Sayers, R. S. (ed.), Papers in English Monetary History (Oxford: Clarendon Press, 1953)Google Scholar. Similar examples can of course be found elsewhere, as in Lille, France, reported in the Archives of the Bank of France, “Deliberations du Conseil Général,” 02 25, 1836(Vol. 20, Fol. 210)Google Scholar. I am indebted for both these references to Professor Rondo Cameron.

8 Conant, Charles, A History of Modern Banks of Issue (New York: G. P. Putnam's Sons, 1909), p. 98Google Scholar. The ultimate backing for the currency was found in similar pledges in Scotland in 1745, in Ireland in 1770, and elsewhere at other times.

9 Premonetary treasure hoards appear to have been accumulations of scarce objects of magical or prestige value, used for essentially ceremonial functions as offerings to temples, to brides, to secret societies, to victors in contests or in war, and the like. See Gerloff, Wilhelm, Die Entstehung des Geldes (Frankfurt: Klosterman, 1947)Google Scholar.

10 Deutsch, , Nationalism and Social Communication, p. 33Google Scholar.

11 Sec the Community's Action Programme,” as reported in The Economist, 11 3, 1962 (Vol. 205, No. 6219), p. 495Google Scholar. Ernst Haas uses the Common Market experience as evidence that “integration” is possible without reliance on a center. His confidence in the cohesion of the Community seems, however, to go beyond what developments to date by themselves would warrant. See his The Challenge of Regionalism,” International Organization, Autumn 1958 (Vol. 12, No. 4), pp. 440458CrossRefGoogle Scholar.

12 Cf. Hoffmann, Stanley, Contemporary Theory in International Relations (Englewood Cliffs, N.J.: Prentice-Hall, 1960), p. 3Google Scholar.

13 Triffin, Robert, Gold and the Dollar Crisis (New Haven, Conn.: Yale University Press, 1960), p. 141Google Scholar.

14 Triffin, Robert, “After the Gold Exchange Standard,” Weltwirtschajtliches Archiv, 1961 (Vol. 87, No. 2), p. 200Google Scholar.

15 Roosa, Robert, “The Beginning of a New Policy,” in U.S. Congress, Joint Economic Committee, Subcommittee on International Exchange and Payments, Factors Affecting the United States Balance of Payments (Studies), 87th Congress, 2nd Session, 1962, p. 332Google Scholar.

16 Bloomfield, Arthur, Monetary Policy Under the International Gold Standard: 1880–1914 (New York: Federal Reserve Bank of New York, 1959), p. 14Google Scholar. As Bloomfield points out, there have been studies of individual central banks and of various aspects of their policies. A history of gold standard institutions is Mertens, J., La Naissance et le Développement de l'Etalon-Or, 7696–1922 (Paris: Presses Universitaires de France, 1944)Google Scholar, but it does not go very far in analyzing their functioning. Morgenstern's, OscarInternational Financial Transactions and Business Cycles (Princeton, N.J.: Princeton University Press, 1959Google Scholar) is highly informative for the four countries to which it restricts attention.

17 Bloomfield, , op. cit., p. 23Google Scholar.

18 Ibid., p. 21.

19 Ingram, James, “A Proposal for Financial Integration in the Atlantic Community,” in U.S. Congress, Joint Economic Committee, op. cit., pp. 175208Google Scholar.

20 Ibid., p. 179.

21 U.S. Congress, Joint Economic Committee, Subcommittee on International Exchange and Payments, Hearings, Outlook for United States Balance of Payments (hereinafter cited as Hearings), 87th Congress, 2nd Session, 1962, p. 195Google Scholar.

22 Feis, Herbert, Europe, the World's Banker (New Haven, Conn.: Yale University Press, 1930), p. 466Google Scholar.

23 Bloomfield, , op. cit., p. 39Google Scholar.

24 U.S. Congress, Hearings, p. 119Google Scholar.

25 Meade, James, “The Future of International Trade and Payments,” Three Batiks Review, 06 1961 (No. 50), pp. 1538Google Scholar.

26 U.S. Congress, Hearings, p. 241Google Scholar.

27 Jaroslav Vanek holds a different view; see “Overvaluation of the Dollar: Causes, Effects, and Remedies,” in U.S. Congress, Joint Economic Committee, op. cit., pp. 267286Google Scholar.

28 Quoted in Common Market, March 1963, p. 51.

28 Herbert Feis, loc. cit.

30 Morgenstern, , op. cit., p. 563Google Scholar.

31 One can compare the average current account surplus from 1951 to 1955 with that from 1956 to 1960. For Germany it rose from 1.95 percent of the average Gross National Product to 3.04 percent; for the United States it fell from 1.21 percent to 1.04 percent. Clearly, world demand was shifting from American to German goods. (Computed from figures in Organization for Economic Cooperation and Development, General Statistics, 11 1962Google Scholar.)

32 Kitzinger, Uwe, The Challenge of the Common Market (2nd ed. rev.; Oxford: Basil Blackwell, 1961), p. 153Google Scholar. See also Organization for Economic Cooperation and Development, loc. cit.

33 Morgenstern, , op. cit., p. 572Google Scholar, reflects the same view.

34 U.S. Congress, Hearings, p. 121Google Scholar.

35 Roosa, , loc. cit., p. 328Google Scholar.

36 The United States, Germany, Britain, France, Italy, Switzerland, Belgium, and the Netherlands.

37 U.S. Congress, Hearings, p. 132Google Scholar.

38 North, R. C., Koch, H. E., and Zinnes, D. A., “The Integrative Functions of Conflict,“ Journal of Conflict Resolution, 1960 (Vol. 4, No. 3), p. 359CrossRefGoogle Scholar.

39 U.S. Congress, Hearings, p. 199Google Scholar.

40 Mr. Bernstein's Programme,” The Economist, 11 23, 1963 (Vol. 209, No. 6274), pp. 795796Google Scholar. The eleven countries are Belgium, Canada, France, Germany, Italy, Japan, the Netherlands, Sweden, Switzerland, the United Kingdom, and the United States.

41 Roosa, , loc. cit., p. 332Google Scholar.

42 With the exception of Switzerland, these are the countries included in the Bernstein program. Switzerland, not a member of the Fund, has nevertheless agreed to conclude equivalent bilateral agreements with the ten separately.

43 Lieftinck, Pieter, Recent Trends in International Monetary Policies (Essay in International Finance No. 39) (Princeton, N.J.: International Finance Section, Department of Economics, Princeton University, 1962), p. 12Google Scholar.