In the first chapter some emphasis was placed on the supposed workings of the gold standard and the attitude of some nations towards free trade and towards protectionism; particular emphasis was placed on the important role of Western Europe as a source of international capital investment. According to the statistics of the League of Nations for 1913, the total gross long-term investments made by Western Europe amounted to 40.5 billion dollars. The main capital-exporting countries were the United Kingdom ($18 billion), France ($9 billion) and Germany ($5.8 billion). The United Kingdom, during the years 1910–13, was exporting capital each year which was the equivalent of ten per cent of her gross national product. It seemed, therefore, that when the First World War broke out Western Europe was economically particularly strong. As has already been indicated, during the occasional temporary crises which occurred in one or another financial centre (especially the Baring crisis in 1890 and the New York crisis in 1907), the Banque de France was always prepared to give assistance; Britain relied also on the reserves of India.
KeywordsEconomic Integration Monetary Union Custom Union European Economic Community Trade Diversion
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