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the form of organization of monetary relationships, encompassing domestic monetary and credit circulation and the sphere of international payments. It developed first within the framework of national economies. With the formation of the world capitalist market, the monetary system of the capitalist countries was transformed into a world monetary system. At the start of the 20th century, the world capitalist monetary system reached its highest level of development. Its foundation was gold. The gold standard, which was established in the main capitalist countries, guaranteed stability of monetary circulation, freedom for capital to flow from one country to another and for international payments to be made, unlimited exchange of national currency, and the movement of foreign exchange rates within the limits of the gold points.
With the general crisis of capitalism, a crisis of the world capitalist monetary system set in. The gold standard collapsed. Gold ceased to function as a means of circulation and means of payments, but continuing to function as a measure of value and means of forming treasuries and world monies, it remains the foundation of the world capitalist monetary system. Although most international settlements are carried on by means of bank transfers without the participation of cash, gold remains the primary means for final settlement of mutual monetary demands and obligations in the capitalist countries, and the size of gold reserves is an important indicator of the stability of capitalist currencies and the economic potential of individual countries. In 1969 the official gold reserves of the capitalist world were estimated at $41 billion and corresponded to more than one-fifth of the total import of the capitalist countries. Despite the withdrawal of gold from circulation and the prohibition on ownership of gold in a number of countries, including the United States and Great Britain, in 1969 more than $20 billion worth of gold was held by private parties in the capitalist world. The circulation of nonexchangeable bank notes and paper money now established in the capitalist countries makes it possible for the monopolies to use inflation extensively as a means for additional exploitation of the toiling masses. In connection with the development of noncash settlements and the scarcity of gold, paper valuta is used in international monetary circulation. The largest shares in this circulation in 1968 were held by the US dollar (25-30 percent), the pound sterling (20-25 percent), the West German mark (5-6 percent), and the French franc (5-7 percent). The capitalist states intervene in the sphere of international payments, making extensive use of currency restrictions, payment agreements, devaluation, and so on. The International Monetary Fund and the International Bank for Reconstruction and Development, in which American and British capitalists occupy a decisive position, play an important part in the world capitalist monetary system. The weakening of US and British positions in world markets and the inflationary depreciation of their currencies are undermining the significance of the dollar and pound sterling as means of international payment. At the end of 1949 US gold reserves were $24.6 billion, or 70 percent of world reserves (excluding the USSR), whereas at the end of 1968 they had been reduced to $ 10.9 billion and were 26 percent of world reserves. The gold reserves of West Germany, France, Italy, and a number of other countries have increased. Failure to make full use of productive forces during the period of the general crisis of capitalism (chronic underuse of the production system, mass unemployment) is reflected in the monetary system: surpluses of loan capital increased, which influences both domestic markets and international settlements. In the world capitalist monetary system, the share of transactions not related to trade is increasing. During the 1960’s, 40 percent of the international payment turnover went for nontrade transactions. Inflation, changes in the structure of international monetary circulation, and other factors cause more and more frequent shake-ups of the world capitalist monetary system.
The socialist monetary system, which was established first in the USSR and later in the other socialist countries, has been transformed, with the formation of the world socialist market, into a world socialist monetary system. The international accounts of the socialist countries are built on the principles of equality and mutual advantage, and develop in a planned manner on the basis of the foreign-exchange monopoly. A majority of these accounts are directly tied to foreign trade. The transfer ruble is the primary means of international settlement among the socialist countries for both trade and credit relations. The International Bank for Economic Cooperation that was established by the member countries of the Council for Mutual Economic Assistance is an important link in the world socialist monetary system. Many settlements among socialist countries for nontrade transactions are carried out in national currencies. A permanent commission on monetary and financial questions of the Council for Mutual Economic Assistance is developing joint measures and organizing exchange of know-how in order to further strengthen and improve the socialist monetary system.
M. P. MIRONOV