The Business Cycles in the UK and the International Gold Standard before tbe First World War（1870−1914）＊

The Business Cycles in the UK and the International Gold Standard before tbe First World War（1870−1914）＊

Kazuo Tokue      

1  1n，roducfion

It i・w・11 kn・w・th・t the ec・n・mic situati・n in thi・peri・d（1870−1914）h。d the foUowing two characteristics． First， prices and rates of interest had th・fluct・ati・n・・f・b・ut 10 year−cy・1es， th・J・glars whi。h，yn。h。。ni。ed internationally． Secondly， the international gold standard was stable．

H・ware th・tw・ch・・acteri・ti・・rel・t・d t・each・ther？Thi。 p。per will discuss this problem by considering the relationship beween UK business cy・1・・and th・g・1d・tand・・＆B・t thi・p・・b1・m is s。9。neral md b．。ad th。f

●1t seems previous studies were obliged to confine themselves to either ot th・m・F・・d（1962）・h・wever， m・d・㎝・tt・mpt t・unit。 tw。 a。pect。。f the p・・b1・m f・・m thevi・w−P・i・t・fin・・me analy・i・． B・this an。1y、i。

・1nv°1ved th・p・・b1・m th・t th・・h・rトt・・m・hanges were mechanlcally sepa「at・d f・・m th・1・ng−term trend・（t・b・discussed l。ter）．

The apP・・ach t・k・n here i・diff・・ent f・・m F。，d・，，。nd th。 differen。e b・・ica11y・・mes f・・m different・i・w・・f th・hi、t。．i、al fram。w。rk in thi。

P・・i・対・ln thi・p・per， we a・e n・t・・ncern・d with・1・b。1。ting。n th。 tw。

approachs， but the essencial points of the historical framework are as follows、

1N・wly i・d・・t・i・li・ing・・unt・ies such as th・US㎝d Germany came to the front and challenged the Pax Britannica． Britain transformed herself into the World sShipper and the World sBanker under th・i・p・ess・re・・nd・h・t・・n・d her hi・t・・ica1 P。、iti。n f．。m・th。

Workshop of the World to the Monopolist of Colonial Markets ． 21n thi・hi・t・rical f・am・w・rk， it i・ass・m・d th・t th・b・，iness cy。1es in th・UK were d・termin・d th・・ugh tw・rel・ti・n、hip，， th。。n。 b。tween th・UK鋤d・ther capit・1i・t・・unt・ies㎝d th。。ther。n。 b。tween th。

UK and the developing countries．

Whe「ea・F・rd（1962）・・n・idered th・g・ld・t・ndard f・・m the vi。w−P。int

゜fth・1・tter・e1・ti・n・hip， thi・p・per intend・t。。。n。ider the ab。ve

2

       ．

@       P

垂窒盾b撃?香@from the view−point of the former．

＊This paper is based on my report， The Business Cycles in th6 UK

Political Economy on Sept．29，1979． I would like to express my sincere gratitnde to Professors S． Nishimura（Hosei Universlty），C． R． Adams、

（lbaraki university），S． Tanaka（lbaraki Universiny），A． Isogai

（lbaraki Universlty）and M． Nakano（lbaraki University）who provided valuable comrnents and assisted in my translation．

2  The dusiness cycles in 奮he UK

It is obvious that exports（of goods and／or services） were of major importance for the business cycles in the country such as the UK whose economy was thoroughly opened to the rest of the world． Fig．1shows the variations of UK exports of goods by area in order to consider the

impact of exports on business．cycles． The exports to Asia， Africa and Australia among developing countries had a growing tendency and took

       1

狽??@largest increase in『 狽??@6th cycle （in 1910s）・ But they in genera1 fluctuated in smaller scale until then and， therefore， played a role like acushion against the sharp decline of the other exports in the depression＄

（see graph （4） in Fig．1）． Contrary to this， the exports to Europe and North and South America fluctuated in larger scale（see graph（1），

（2）in Fig．1）． That is suggesting that the exports to the capitalist nations in Europe and America were a strategic factor．

Now， to review the foute of the prosperity in the UK， it is evident th・t expan・i・n・w・・e t・an・fered n・t・nlylf・・m exp・・t・t・h・m・p・・ducti・n・・

trades， and traffic but also from・shippings and s毎ip−buildings to the other related heavy industries． Therefore， the peculiarity of the business cycles in the UK was that the Juglars were theexport−1ed cycles． This is nothing other than the export−national income transmission mechanlsm clarified by Ford（1962）．

But let us refer to the graph（1）in Fig．2which shows the rate of deviations from the Iinear trend by the method of the least spuare． It

The Business Cycles in the UI（and the International Gold Standard  3

1870        茸875        1880        1885        1890        1895        1900       1905        1910     19ユ4

十30

十20

｛11Europe

十10

0

一10 1       ハ ロ

十10

   ！1    ハ       、 n

n ／遺欝讐㌣ハ照ハ1       レ

 0

￨10

一20 ・      ll−  ，1

（・）A・i・（・・1idli・・）  ・    ll l＼1     ●       9

．m

@  l 八 ・＼1／41伽1

〆・， ・ 1  だ．        1 ^」

     ＼・ ．       昌

@       1 ^{■      嘲}

       ，

怐@       虚 9

0 ・ N _{■     ●}

・・

@   7     ・

一10

       」

i4） Asia十Africa十

Australia （broken ］ine）      o         ，

C  1

一20

1870         1875        1880         1885        1890        1895        1900        】905         1910      1914        《Fig・1 Annual Variatio！1s of Exports of G（xxls， by Area，1869−1914；￡M．

Source：W． Sch16te（1938）

4

       P

撃W70       1875       1880        1885        1890        1895       1900        1905        監910     1914 2．0

LO ω GDP

 10

￨LO ^へ_＼ ^8．0

2．O

kO

照 ω一一 n       ⊥．

7．0

U．0

  o

￨1．o

￨2．0

￨3・0．

15．0

S．0

R．0

Q．0

DLO       1へ  A               、

置       レ 、ノ 、｛3｝ GDFCF               、    卜、 ⁰

l   lωgh・・i歯蜘ノ  l l．

一3．0

￨4．0

1      、    ！ ^一5．0

    1

P  ， ^一6．0

2．0 1   ・−V．0

1  ω COSUMER S EX P ENDITURE

LO ^{覧   一8，0}

1 一9．o

0 〉

一LO

一2．0

2．O

kO

△1笑興 〜…璽∵塑1堅㌦

 0

￨】．0

一2．0

2．0

1．0 16，1MPORTS

0 一1．0

一2．0

、．＿

Fig．2 ％Rate of Deviation fro霊n Linear Trend by the Least Square Regressions；1870−1914（Source：data hl currellt prices from C・H・

Feinstein（1972），which are transformed int⊂用atural 1（⊃garithms）

The Bnsiuess Cycles in the UK and the Intemational Gold Standard 5

・h・w・！・1ea・ly the cy・1ical f1・ctuati・n・in GDP cann・t f・11y be exp1。in。d only by the export fluctuations・That is， the first and 4th cycle（in the 1870s and the turn of the century） are larger than others， and their peaks 1・gb・hind th・・nes・f exp・・t・・W・m・・t t・k・int・acc・unt the changes of the domestic fixed capital formation（GDFCF）and the consumer s expenditure as wel1（see graph（2），（3），（4） and（5）in Fig．2）．

But from Fig・3（the domestic capital formation）， it can be seen that dwellings and the other buildings and works show Kuznets cycles with two peaks in the mid−1870s and the turn of the century， though the fluctuations in・hips and vehi・1es a・e li・k・d d・sely with the exp。，t。y。les．1

iThe

t・t・1d・mest董・inve・tm・nt w・・a1・・i・fl・enced by th・Kuzn・t・cy。les in dwelhngs and the other buildings）． In addition， it can be seen from graph（4）in Fig・2 that the first and the 4th cycle in the consumer・s expenditure are larger than others， and thus it can be verified there was the effect・f K・・n・t・cy・1es in the c・n・umeゼsexp・ndit・・e． lt m。y therefore be said that the business cycles in the UK were under tha double i・fl・ences・f th・K・znets cydes and the ex⑳・t−1・d・y。les in thi， peri。dl

5  The bGsic imp（】cf of business cyGles on 量hθ gold sbndqrd

Th・L・nd・n m・n・y mark・t・nd th・B・nk・f E・gland were a m・in，t。y

・fth・i・t・・nati・na19・1d・tand・・d． Th・b・・iness cy・les in th・UK gave b・・i・impact・・n th・m th・・ugh d・m・・ti・t・an・acti・n・〈1＞and f・・eign ones〈2＞．

＜1＞Table l shows the annual variations of GDP and net internal drains

・fg・1眺f・・m th・Bank・f Engl㎜d in each ph・・e・fth・B・iti・h referen・e cycles． We can confirm from the table that the growths of GDP in the boom−phases caused gold to flow from the Bank to the domestic market and， on the other hand， there were the decreases of internal drains or the net internal refluxes into the Bank during the depressions． Nishimura

（1980）h・・already・1・・ifi・d th・t g・1d・・in・p1・y・d・m・j・r r・1・in the ch。nges

・fca・h−circ・1・ti・n whi・h acc・mpani・d the ch・ng…f・mp1。ym。nt。nd c°nsumpti・n・Theref・・e・each・xp鋤・i・n in b・・m−ph・・es gave a di・ect impact

6

80

Other new

bui夏d量ngs and

70 works

160

      ，

@     ，

^＼，／＼＼ 1旨lan・ _and

50   ＼  ，m・・hi・・士y

40 ノ    ／

〆／ ＼一一＼   

     ＼ 30

w2P  8

@ ， I：〉グ

飯、♂振囎      、へ＿二＼／  一／      ＼、       ＿＿／       ＼一 ！       Dwel且ings

vehicleS

10

187。 1875  1鴎。 i器5  189・  1895 19〔・｝ 19°5 191° 1914 Fig．3 Gross Domestic Capital Formation at Current Prices・by Type of

Asset，1870−1914；￡M．（Source：CH・Feinstein（1972））

The Bnsiness Cycles in the UK and the International Gold Standard 7 Table l Annual Variations of the GDP and the Internal Go】d Drains from

the Bank of England in the Reference Cycles of the UK；￡M．

nO． phase year

   ω 魔≠窒奄≠狽奄盾獅唐

f GDP

   （21n

?煤@internalr

獅盾魔?高?獅狽?

．B．of E． n ^{． p}

ase y_ar  ωva

窒奄≠狽奄盾獅唐盾?

@GDP  

  （2）ne

煤@intarnalmo

魔?高?獅狽?秩 DB．of E．

71 9 96 6 2 2

om 1 ⁷²¹⁸_V3⁵⁵ ₇ ⁹⁷¹⁸_{X8 2} ⁹⁹

2

63．

P 7418

V5  

35−3 72．

O 4

b om 1 ⁹⁹¹⁹_{O0 1} ⁰⁸³₇ ^24．_V

ump 1 _{V7 一}^{7618 5−2} P

．9−1

D8

0119 O2 1

61−2 W 一

．7 1

D6 8801 143 ₈ ^{ump 1 03 一} 0 ⁴

om 1⁸¹¹⁸_{W21 一} ^0 3V

62．

S

0519 O6 4

54 1

94．

Q

83 4 0 4 ^b om 1_{07 4 4 7}

84 一 1 0 ⁹ 08 一 2 一 ．9

ump 1 ^{85 一} 1 1 ^{7 ump 1} 09 6 6 0

86 一 一 ^．3 _{10 7 5}

2

88 1 0 5 11 8 7 2

b

om 1⁸⁹¹⁸_{X0 4} ⁴²₃ ^62．_S ^b om 1_{P3 5}¹²¹⁹ _U¹³₅ ^69．_P

 「    11891i     43  1  −0．4  

@         1

ump 114 4

92 一 9  1  −2．0 ump  

@  「 193 一 8 一 ．1 「        r

urce 3｛1）GDP on expenditure base  current prices from C． H． Feinstein 972）；（2）plus figures are net illternal drains from the B．of nd minu・fig・・e・are net inf1・w・t・th・B．。f E，f．。m Nishimura（1980）  

@         ．

8

      4

On the London money market through growing demands for gold coins．

＜2＞The graph（1）in Fig．4show that the balances of trade of goods and services had the following characteristics：first， the well known changing patterns， i． e．，surpluses in booms and deficits in depressions（see Minz

（1959））；secondly， the greater adverse balances in the 4th boom（the 1atter half of 1890s） as the distinct exception to this general pattern・

One reason is that the exports fluctuated sharply over the business cycles except for the stagnation in the 4th cycle， as can be clearly seen from

Fig．1and 2， （2）． The other reason is that the imports fluctuated      ，

moderately and took a growth in the boom， as was evident from Fig．2，

（6）．So， how can the fluctuations of the imports be explained？

Table 2 shows the regressions of imports of goods and services on exports（E）， GDFCF（1）， consemer s expenditure（C）and time factor

（t）during thls period． Eq．1regresses imports on exports and investment・

Eq．4regresses imports on exports and consumption． It is clearly evident from Eq．4in the table that the combination of exports and consumer s expenditure fits best， and that the latter has more explanatory power than the former． Incidentally， graphs（2）and（3）in Fig．4show the other trade balances by using the computed series of imports which are calculated by Equatin l and 40f Table 2． It is evident that the graph（3）

apProximates more closely to the graph（1）． Hence we can find that the consumer，sexpenditure is the most important explanatory variable of the imports and thus Kuznets cycles are reflected in the imports through the consumer，s expenditure．

Therefore， it may be concluded that the general pattern of balances of trade could have been determined by the characteristics of the UK business cycles， i．e．，the combination of the export−led cycles and Kuznets cycles．

We have described the internal gold drains in each boom． They were occasioned by the needs of trade and not by panicky private hoarding．

For the UK business cycles had the following two features in both home and foreign transactions：

1 1n booms． Although the expansions of domestic trades caused

The Business Cycles in the UI（and the International Gold Standard  9

1870 @ 1β75  ］圏0  其885  1890  1895  1900  1905  1910 19！4 50

40 R0 Q0 P0

（1） original data

0 一10

一

一20 τ30 一40 一50

一．U0

￨70

@10

   （2） estimated imports（Eq．1，Table 2）

@       ノ㌦＼

       〈

0 、

一10

、    ／へ、／     ＼            、、、  ノ1       ＼1＼      1

一20 、            、              ，

一30

ソ     ＼  ，！

．−S0

￨50

@  

／（、）。、，im。，。d im，。，，s   、 ／ ハ／＼バ等吋納2）＼＿／バー       ．       「

4α f30

Q0 P0

・      ／      ・、．／         o

，1 t ⁰

＼ ^一10

￨20

￨30

￨40

￨50

＼／＼／ノ ^一60

 、 ， u70

Fig 4 Three Kinds ，f the Balances of Trade｛， Goods＆Services，1870−1914；

￡M．（S（川rce：｛110riginal data are from C． H． Feinstein（1972）；

estimated imports in（2），131 are from Eq． l and Eq．2in Table 2，

respectively）

10

Table 2 Regressions of Imports of Goods＆Services on Exports， GDFCF，

Consumer sExpenditure and Time Factor：1870−1914

Eq． constant variable 1 variabIe 2 variable 3 ^R＊2

1 1．8718 0．8191・E 0．7890・1 0．9710

（0．1373） （28．2066）＊＊ （8．5496）＊＊

β＊（0．8351） β＊（0．2531）

2 ^{96．0285 0．6432・E 3．5761。t 0．9730}

（5．0379）＊＊ （15，6162）＊＊ （9．0195）＊＊

β＊（0．6557） β＊（0．5059）

3 ^52．6236 0．6631・E 0．5059・1 2．3913・t 0．9877

（4．0659）＊＊ （23．7068） ＊＊ （7．1404）＊＊ （7．5882）＊＊

β＊（0．6760） β＊（0．1621） β＊（0．2522）

一一

4 ^{一37．4073 0．4356・E 0．2198・C 0．9891}

（−1．9454） （12．4919） ＊＊ （16．2325）＊＊

β＊（0．4441） 1β＊（0・5770）

5 一162．6360 0．5058・C 一3．4666・t 0．9595

（−2，7711） ＊＊ （12．1988）＊＊ （−3，3729） ＊＊

β＊（1．3277） β＊ （−0．3671）

6 一55．9277 ^{一〇．4306。1} 0．4109・C 0．9573

（−2．1859）＊ （−2，9386） ＊＊ （22．9438）＊＊

β＊ （−0．1381） β＊（1．0786＞

Source：original data are from C． H． Feinstein（1972）

Note：R＊2 is coeficient of determination adjusted for degrees of freedom；

β＊is standardized regression coeficient； figures in parentheses are t−value； ＊p＜0．5；＊＊p＜0．01

The Business Cycles in the UK and the International Gold Standard 11 stringency in the London money market through internal gold dralns，

at the same time the balances of trades ameliorated and moderated or

      戸

盾??唐?煤@the strlngency of the London money market．

2 1n slumps． The deficits of the balances of trade increased， but at the same time there were net gold refluxes into the Bank of England from the internal circulation．

Thus， it can be concluded that the UK could evade any serious financia1 panic through these mechanisms．

4 Gold movemen†s Gs fhe frqnsmission mechonism of impocf

The gold reserves of the Bank of England were influenced not only by the internal gold drains but also by external ones． This section wil1 discuss the following three factors which influenced the external gold movements：

（1）the external movements which were caused by the relationship between current balances and capital exports．

（2）the external drains caused directly by foreign gold demands which，

in turn， were the consequences of private hoardings due to the breakdown of speculation， the financial panic or the urgency of wars．

（3）the net gold influxes from abroad which offset the internal gold drains in times of domestic booms

Let us refer to Fig・5・What is evident from graph（1）in Fig．5is as follows：first， there are the large continuing surpluses of current balance；

secondly， capital exports（new foreign issues）are more or less the same       5as the movements of the current balance．

The first point is attributed to the steady increase of net property income from abroad which shifted the trade balance upward． But it is just the large continuing surpluses of current balance that supPorted the Iarge−scale foreign investment and also consolidated confidence in sterling．

The confidence in sterling was at the root of the position of London at the top of the hierarchy of international money markets（Lindert

（1969））・The position of London as the international money market gave

12

、  1870

       ノ P875        1880        1885        1890        1895        1900        1905        1910      1914

200

        ＼

@ A 

loo

      （ll new foreign issues        ，

w ノ＼》、ボ）器翫

、  ノ軸

、！

0

50

（2） balance of trade of goods and services

、、

o−50

〈

／ ＼

200 ^{A ノノ、}

        V

i8）9，。ss d・m・・fi・fi・ed         1

100

剛㎞㎜t㎞

黶@  ＾／

@       ／l  J＞

Fig．5 C。rre。t B。1・nce．・f T・ad・， C・pi・・I E・p…and GDFCF・18704914；

￡M．（S。。，ce・ωb・1・・ce・n c・rren・・cc・・n・f・・m lml・h（1958）；

。。w f。，eig。 issue， f，。m Sim・・（1967）， cal畳ざ ：（2）b・1・・ce・f t「ade

。f g。。d， and se，．ice， f・・1・F・i・s・・i・（・972）・9…ss d・mestl・fixed capital formation fr（m Feinstein（1972））

The Business Cycles in the UK and the International Gold Standard 13 it a deposit−compelling Power（Brown， Jr．（1940））．

The meaning of the second point can be explained as follows：first，

the British capital exports returned gold to lthe rest of the world，

which would have accumulated in the UK， were it not for capltal exports；

secondly， the capital exports did not cause gold to flow out of the UK，

which would have occurrεd if capital exports had largely exceeded the current balance surpluses． Moreover， a rise in the Bank−Rate could restraln the capital exports and absorb the short−term funds and gold from abroad， whenever the British capital exports exceeded current，

balance surpluses by Iarge margins．

Therefore， it is not recognized that from the relationship between the lcurrent balance and capital exports there were any external gold drains which threatened the gold standard． To the contrary， this relationship conditioned the stability of international balance of payments between the UK and the other countries．

What is evident from graphs（1）and（3）in Fig．5is as follows・First，

in the uplifting Perlod of Kuznets cycles of the mid一ユ870s and the turn of the century， it can be seen that the domestic economy grew faster，

that the imports grew faster and that the current balance surpluses decreased． At the same time it can be observed that the capital exports slowed down． Secondly， in the downswings of Kuznetsごycles of the 1880s and of 1905−14， we can conversely see a stagnation of imports，

an expansion of exports and the resultant increase in surpluses in the balance on current accounts． That means that the current accounts of foreign countries were experiencing deficits． But since at that time the British capital exports increased， foreign countries as a whole did not get

into difficulties， and they also could replenish their London balances and      6

р奄п@not lose their domestic gold reserves to any great extent．

Therefore， the major cause of the external drains of gold frorn the UK was not deficits in the overall balance of payments， but the factor

（2）mentioned above． A typical example was the absorption of gold by the US from 1904 to 1904． The raising of the Bank−Rate in 1907 in

14      も

defense of the gold reserves caused repercussions on the internationa1 money markets and caused a disruption of the multilateral trade mechanism，i．

@       7

?D，the 1907 crlsis．In general， whenever gold left Britain in the years priQr to 1913 the Bank of England and th6 London market could attfact gold from abroad by various means． There was not only the Bank−Rate policy but the Bank s borrowing from the market to make it effective and various gold devices as Sayers（1936） made clear． In addition to these means， we must not fail to notice the peculiar historical circumstances． Since British India and Japan were the larger holders of

sterling in this period， British suzerainty on India and the Anglo−Japanese       8

̀Uiance contributed to the defence of her gold reserves．

The offsetting relationship mentioned above may be schematized as follows：external gold drains−the rise of the Bank−Rate−gold inflow from abroad． While the Bank of EnglanαIooked upon the external gold drains as more important as Sayers（1936）said， she was generous to the internal drains caused by domestic expansions， because she could re1y on this relationship． This point is connected wlth the next factor（3）・

Let us refer to Fig．6． It is evident from graph（1）and（2）that there are net gold inflows from abroad into the Bank of England whenever the・Bank−Rate rises in booms with exceptions of 1876 and 1894−5・This means that the rise of the Bank−Rate could induce external gold inflows which more than offset the external attractions of gold． However， gold reserves decreased because of the internal drains caused by domestic booms． We may even say that the more important influences were not those from abroad but those from the domestic market．

Let us refer to graph（3）and（4）in Fig・6・It will be clearer that the internal gold drains lower the Proportions in the Banking Department of the Bank， which cause the authorities to raise the Bank−Rate， which，

in turn， promotes the：het gold inflow from abroad． Thus， we can schematize the transmission mechanism of impact through gold movements as fo110ws：the net internal gold drains−the rise of the Bank−Rate−the net gold inflow from abroad．

The Business Cycles in the UK and the International Gold Standard 15

1870        1875        1880        1885        1890        1895        二900        1905        1910 1914

（％ ̲ωt腰・懸、  一 碧 グ 〉ゾ＼一！ソ＼ ノ＼畿住ノノ

@       ソX／／m。，k。・，a・，，。f      、、1       3months bank bills

10 1

8 （2）n・texternal g・ld    1

6 （￡M）1 inflow into the       l

a・fE、→画  1

4 ^ハ

1、

@；

20

    、

@    、     べ

1  A「  、

@    、

！．、・、＾

A・1

一2

￨4

一1   、 ノ  へ4 ・ぜ      題  、       、        、       1 ／》7V Vv1τ， ぐ・net increases of gold reserves

一6

｛31 net gold internal drains       l l  oftheBofE．  ＼1 ⁷⁵

fr． the B，of E．      曾

3

10馳

一1

（￡M．）

・−R

一5

・・（4）         へ←th・B・nk−R・te  5

（％）  ←th・P・・P・・ti…    1＼      「     、

A           、

5° wゾ1鵬！押翫＼鰍密／40      V  V    ＞ 43

30

（％）  

1870 1875        1880        1885       L1890        1895       1900        1905        1910 2 Fig・6 The Bank−Rate， Net Gold Movements and the Proportions of the

Bank of Engiand，1870−1914（Source：lP 3 months bank bin from MitcheH＆Deane（1962）；the Bank−Rate from ShepPard（1971）；

②net external gold inflow into the B． of E．，net increases of gold reserves of the B．｛，f E．，｛31 net gold internal drains f！㌔the B． of E．

are from Nishimura （1980）；the Proportlons are the Reserves／Liabilities in the Banking Deμof the B． of E．，from Pigou（1927）

16

5  Concluding remαrks

So， did the transmission mechanisln descrived above cause the turning一 points of business cycles？  There is insufficient space to continue this description but， to summerize the key−points， they are as follows：

1The internal gold ldrains would proceed not only in Britain but also in the US and European countries which were on the gold standard，

when their domestic economies were booming． At the same time， the raising of the Bank−Rate by the Bank of England absorbed short term capitals and gold from those countries， so that those countries were Plunged into depressions．

2The exports of the UK to Europe and the US were the major influences on the domestic trades of the UK with exception of the 6th cycle in 1910s， when the exports to the British Empire and developing cd」ntries gained the Iead． It can， therefore， be thought that the credit−stringencies in Europe and the US had to be effective to shut out the commodities of the UK．

3As Ford（1962） made clear， the net gold inflow from the main European countries responded most sensitively to the changes of the Bank−Rate by the Bank of England．

As for the details， there is no alternative but to wait for future study．

To summerize the total view of the business cycles in the UK， it is the combination of the fo110wing three aspects：first， the export−led cycles；secondly， the Kuznets cycles manifestng themselvse in GDFCF，

consumer sexpenditure and imports；and thirdly， the monetary transmission mechanism based on the internaI goId drains from the Bank of England．

＜Nαes＞

1．S． Kuznets（1930）． We use the term Kuznets cycles in spite of the criticism by Hansen．

2． A．G． Ford（1962）used the series of 9−year moving average tq analyse the Iong trends which included I（uznets cycles， and on the other hand he used the residual series from them to analyse the short−term

The Business Cycles in the UK and the International Gold Standard 17 cycles which we name Juglar cycles． As a result， both cycles were completely separated from each other． We used the series of rates of deviation from linear time−trend in Fig．1， following the suggestion by P・J・0 Leary＆W． A． Lewis（May，1955）in order to confine ourselves to the least separation of linear time−trend．

3・W・C・Mitchel1＆A． R Burns（1947）and K． Tokue（Aug．，1980）

4・We think W・E． Beach（1935）is a finder of internal gold drains and their meanings in business cycles． The most important work in Japan ls S． Nishimura（1980）

5・ Net capital exports should include not only the new foregn issues but also the transactions in the existing securities and their redemptions． But here it is assumed that the new foreign issues represent the capital exports．

6． But in the peripheries of the international gold standard the story ls different． As verified in Argentina by A． G． Ford（1962）， some underdeveloped oountries whose current balances were adverse and offset by borrowing from developed countries were frequently obliged to go off the gold standard and to depreciate the currency， when their borrowings were stopped．

7． In Japan there are powerful thoughts that commercial crisis was occasioned by external gold drains． Representative works are M．

Takumi（1976） and T． Kawakami（1971）．

8・ Russia also was the largest holder of sterling． See A．1． Bloomfield

（1963），Fig．1， ApPe．1and M． de Cecco（1974）and P． H． Lindert

（1969）

＜Bibliogrqphy＞

（1）Publications in English

W．E． Beach（1935），β7跳ん1漉〆ηα oηα Go1威Mω6鷹鳩απ4 B朋々魏gPo〃c〃1881−1913， Cambridge＆Massachusetts．

A・1・Bloomfield（1963）， S加ア −T6ア鋭C砂〃α1 Mo〃θ耀π sση4θプ緬θ P7召一1914 Go14 S αη4αア4， Princeton Studies in Internationa1

ユ8

Finance， No．11， princeton

W．A． Brown， Jr．（1940），1漉ア〃 励α1 Go14 S 24α74；

Rθ加 6ゆ7θ 64，1914−1934，NBER

M．de Cecco（1974），丁舵1漉プ槻だoπα Go14 S如η4αア4， F「ances Printer． London

C．H． Feinstein（1960）， Home and Foreign Investment：Some Aspects of Capital Formation and Finance in the United Kingdom，1870−1914 ，

（Ph． D． Thesis）

C．H． Feinstein（1972），1Vαがoηα1∫ηco吻θ， Eκ」ウ6η〃 πプ6〃π40漉ρ％

o∫飾θσκ1855−1965。Cambridge U． P．

A．G． Ford （1962）， 丁加Go14 S如η4α74 1880−1914：β7髭αゴη α〃4 ノ1プ群漉加o，Oxford U． P・

A。H． Imlah（1958）， Eco初oπゴc E1脚6η sゴπPακβ痂α〃πゴcα，

Harvard U． P．

S．Kuznets（1930）， S6c α7 Moひ彿θ漉s加P704πc撚oηαη4 P7 c6s，

The Riverside Press reprinted in 1967 from Augustus M． Kelly Publishers

P．J．0 Leary＆W． A． Lewis（May，1955）， Secular Swing in Production and Trade，1870−1913 ，ル勉πc加s 67 Sc乃ool oア

EcOκ0〃2fc ππ4 SO（ゴ〃1 S Z44f6ε

P．H． Lindert（1969）， K6雪Cκアγ6ηc飽s伽4 Go14 1900−1913，

Princeton U． P．

1．Minz（1959）， Tプα46 Bα1研c684z 加9βπs魏8∬CΨc1θs：σSα 4 B7〃〃加s加c61880， NBER， Occational Paper 68， N． Y．

B．R． MitchelI with P． Deane（1962），∠4∂s〃π6 o∫Bアゴ ゴs乃 伍s oプ∫cα1S α ゴsガcs， Campridge U． P．

W．C． Mitche11＆A． F． Burns（1947），ル勧sπ漉g伽s吻∬

CΨご163，NBER

A．C． Pigou（1927），1η4z6s〃毎1 Flzκ z6α ゴo％s， London．

R．S． Sayers （1936），βαη々o∫Eπ91ππ40ρθプ〃 ゴoπs 1890−1914，

Greenwood press

W．Schl6te（1938），β7f 励0刀67sθπs T7副63ルo初1700 01930s

The Business Cycles in the UK and the International Gold Standard 19 trans・by W．0． Henderson＆Other， Oxford 1952

D・K・ShepPard（1971）， T加Gアozσ漉αη4 Ro1θo∫σ1（F∫η伽cゴ01 1〃3ガ z4ガoη31880−1962， London．

M・Sirnon（1967）， The Pattern of New British Foreign Investment

1865−1914 ，in A。 H・Hal1（1968） ed．，丁乃6 E究ψoプ∫o∫C己zρπα1ノアo〃2

B7吻勿1870−1914， Methuen＆Co Ltd．

（2）Publications in Japanese

T．Kawakami（1962），丁舵レ7b 4ル短プ々θ 伽4 Cアゴ3∫s：飾召∫ s

01π〃26，Hosei u． P．

S．Nishimura（1980），丁乃θZ撹〃πα ゴo 01 Go14 S 伽伽 απ4 Loπ40 忽oηθΨMα7々θ ，Hosei u． P．

M・Takumi（1976），丁加∬η 67襯 ゴoηα1 Cπア76ηcτS〃s 翻， Tokyo U．P．

K・Tokue（Aug・，1980）， An Aspect of Growth and Cycles before the First World War ，丁舵ノoκ7〃α10∫Po漉oα1 S 伽c6απ4

Eco〃o〃2ゴcs，ハ汚o．43