ABSTRACT
Among the proposed technical devices which, it is claimed, would be reforms of fundamental importance, the suggestion that Central Banks should operate systematically in forward exchanges occupies a prominent place. The proposal was made originally at the Genoa Conference, but the resolution passed to that effect was never applied by the majority of Central Banks; to a large extent, it remained a dead letter. Its chief supporter is Mr. J. M. Keynes, who, in his books A Tract on Monetary Reform and A Treatise on Money, and more recently in an article in Lloyds Bank Monthly Review, strongly emphasises the advantages of the operation of Central Banks in the forward exchange market. He considers that the adoption of this device is a means by which short-term pressure upon the exchanges could be overcome without disturbance of the internal credit structure.
