Capital, money invested in industry, finance is the machine that handles this investment process and international finance is the mechanism by which the wealth of one country is invested in another.
Consider a doctor from a regional town, who earns about L800 a year, living with its L600, and saves L200. Instead of spending this quarter of his income on instant pleasures such as wine and cigars and moving to London, he was attracted to the benefits of the system and invested through the mechanisms of international finance in various parts of the world. . The investment that was fashionable a few years ago is called geographical distribution.
[2] This means that investors who practice it keep their money in as many different countries as possible to maximize the damage caused by the weather or other disasters. So here we are with this cold country doctor who is spreading all over the world, he has been giving money to his patients for dosing and poultrying and dieting, he has stimulated the industry for many seasons and given a portion of his income to his Brings to add to the store. Let’s see how the process works.
First he has a bank in which he pays the daily fees he receives in the form of coins or notes and the checks he receives every half year from the patients with whom he has an account. . His money is available to the bank as long as it is in the bank and there is no possibility of going abroad. Most of the money allocated to them for banks is used to invest in domestic securities or in loans and advances to domestic customers. As part of that they buy exchange bills drawn on London homes by merchants and financiers around the world so that even when he keeps the money in his bank, it is possible that our doctor is already a member of International Finance. We need to explain one of its secrets that is part of machinery.
An exchange bill is an order to be paid. When a merchant in Argentina sells wheat to an English buyer, he takes the "pay me" (or any other) bill on the buyer (or any bank or company in England that the buyer is attracted to). It may have that name) "How many pounds total." If the bill is drawn on a reputed company or company, the wheat seller can settle it immediately so he gets paid for his goods. The bill usually shows up two or three or sometimes six months after it is seen, i.e. after it has been received by the drawn company and "approved" by it, before being signed out by the company. Pay the bill when the bill is outstanding.
These exchange bills, when so approved, are promised to be paid by first-class firms and kept as investments by English banks. Conversion bills on English houses were designed to finance trade transactions between foreign countries and as a means of withdrawing money from England. Credits are given at home when drawn on behalf of English clients, but as is (almost always) given in relation to international trade, transactions can be considered part of international finance. Is.
The affiliation with international finance becomes apparent when they draw on behalf of foreign countries, do business with other foreigners, or use credit to lend to other foreigners. They are easily taken worldwide because there are individuals around the world who make payments to England due to the wide distribution of our business and England has long argued that London companies have been forcibly exploited. Exchange bills are the currency of international trade and finance.
Some have told us that there is a risk of losing this dominance of the English bill in world markets due to the current war: in the first place because America is getting more money, we are draining our savings and every effort should be made to free themselves from relying on English debt even for the Germans to run their business.
The threat is real, but it does not mean that we can not face it and defeat it. If war teaches us to work harder and use less, then when peace comes we have a lot of goods to export, then there is no reason why the London Bill should not be without the old prestige and dominance. . In world affairs. Because we must always remember that finance is the only slave to the industry. She is a naughty weaver who often steals her mistress' clothes and tries to pretend to be a mistress to the world, and she sometimes imposes it on many people who think the economy is a very powerful influence.
Finance is a powerful influence, but it is only part of the machinery that helps production, speeds up and survives. Those who make and harvest goods, those who take them from where they are made and take them wherever they want, the people who provide the raw material of finance, can find his shop without it. Had to close
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