we became a good country to sell to and a bad one to buy from, goods poured in and our exports were checked; if this process went far enough then some of our gold had to be sent abroad to pay for the goods and services which we had been buying abroad beyond the value of those which we were selling. The result of this export of gold was that the basis of our monetary system was narrowed, and we had to put up for the time being with a smaller volume of money, because the loss of gold made it necessary for the banks to contract the volume of deposits and cheque money, so as to keep up their proportion between cash and liabilities. We had less money to spend and prices would tend to fall because there would be so much less money in our pockets and at our banks ready to pay for goods. We thus became for the time being a bad country to sell to and a good country to buy from, and the process by which we had been buying too much was reversed. In this way big movements in prices could only take place in all the gold using countries together, and so the level of prices was kept much more steady than it would have been if each country could perform fancy variations on it without any reference to the tune being played by the rest of the
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