SECTIONAL TRANSACTIONS.—F. 333 
market involve large and discontinuous movements of funds. But compensatory 
tendencies are set up, which result in a great part of the movements being covered 
by movements of goods. Only a residual movement of gold is required, and even 
that can be avoided if credit is suitably regulated. Regulation of credit may, however, 
be seriously complicated in the event of either over-lending by the investment market 
or of excessive speculation. 
The movement of liquid balances is in practice very much limited by the nature 
of the business of the banks and other agencies engaged in it. The importance of 
such movements is apt to be over-estimated, because, whenever the exchange market 
becomes active, balances appear to be moving. This apparent movement is really 
only a symptom. It occurs when the balances in the hands of dealers in exchange 
have got out of trim. 
The fear that the maintenance of the gold standard may be threatened by dis- 
turbances of the balance of payments is to a great extent mistaken. So also is the 
closely related fear that the United States will acquire a predominant control over the 
regulation of credit. 
10. Mr. P. B. Wuatr.—The Possibilities of Reparations Transfers 
under the Dawes Scheme. 
The division of reparations problem into two parts. Implication that conditions 
not connected with raising of reparations internally govern extent to which transfers 
may be made. 
Foreign loans to Germany and cession of German property rights to foreigners 
only of temporary assistance in the problem. 
This apart, amount of transfers possible depends upon Germany’s excess of exports 
over imports. This export surplus yet to be brought about. 
General rule that exports must be cheaper in country of origin than in country 
to which they are sent. Grounds for this rule. Deduction that export surplus will 
only exist when general wholesale prices in Germany are lower than elsewhere. 
The above rule, however, is subject to important exceptions. (Dumping, export 
of raw materials to contiguous countries, sale of * deliveries in kind’ below reparations 
values.) Consequently a certain export surplus is possible without general prices 
being relatively low in Germany. But probably such surplus would be insufficient 
for the full solution of the transfer problem. Then its enlargement to required 
amount would depend upon a difference in price levels. 
Certain ways suggest themselves in which this difference in price levels might be 
brought about. 
1. By automatic restriction of German currency under operation of new Bank Act. 
2. By automatic restriction of currency as result of internal reparations’ payments. 
3. By deliberate restriction of currency through discount policy of Reichsbank 
under the influence of the transfer agent. 
4, By expansion of currency in other countries. 
5. By an increase in the industrial efficiency of Germany relatively to that of other 
countries. 
Examination of foregoing possibilities. Conclusions. 
Wednesday, September 2. 
A cinematograph film of Southampton Docks was shown. 
11. Dr. Joun Hutme.—Recent Development in Italy’s Textile Industry. 
These observations are, practically, restricted to development which has taken 
place during the last quarter of a century in the cotton and artificial silk sections of 
the industry. 
Historic retrospect. Foundation and successful career of Lancashire’s cotton 
trade. Its attraction of emulation. Influence upon Italy. Her resolve at last to 
enter the competition, and motive for her action. The situation at her entry. Forces 
favourable to her success. Forces unfavourable to it, and how these were either 
lessened or eliminated. 
Learning from Bismarck. A subsequent lesson : “ An opponent’s embarrassment is 
a rival’s opportunity.’ Securing a foothold in a German market and subsequent 
