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 orchestra. So the gold standard, by a beautiful system of checks and balances, maintained price levels in harmony among all the countries that used it and allowed it free play.

Another effect of the use by the chief countries of the same money was that it steadied rates of exchange, which are the prices of their currencies expressed in one another. When claims on England were so plentiful in New York that the price of sterling money in dollars fell below a certain point which was called "gold point," then these claims were in effect sent to London for collection in gold which was shipped to America. The cost of shipping and insuring the gold and the loss of interest involved by its journey were the influences which regulated the gold point. When claims on London were scarce and in demand, the same principle worked in the opposite direction, and so the rate of exchange between London and New York, or between any two countries with monetary systems effectively based on gold, could not, in theory, vary beyond certain limits. Owing to the varying effectiveness of the gold standards of the gold standard countries, fluctuations often exceeded the theoretical limits, but they were very definitely checked and restricted.