International Finaneial Management average behaviour of all the other members, its own voluntary and independent contribution being modest one.” Drawbacks of the International Gold Standard The gold standard suffers from a series of defects. 1. The main drawback of th tandard is that it deprives a country of the power to adopt the particular monetary policy which i ‘mire appropriate to its internal economic condition, ata time when it monetary polic fed to international pressure ange stability, the two mai policy, cannot be, reconcile ‘employment. In the opinion of Halm, the gold standard mechanism is a Weather craft. The mi sm can function only when the rules of the bserved. “It is fair woather craft of doubtful seaw my waters. When the n ry conditions cannot id standard omes the ts d situation.” Violent strains on the ec articipating countries to play according to the rules of the fame. In international gold standard eannot. be id as automatic inee it is to be managed by th r the countries by ng the and feredit expe vlt and dangerous operations. Oftentimes # not be le to engaged in a policy to reduce cosis and prices sufficiently when Gold flows out, or to create enough demand for new loans when gold Bctis in. ed that the gold standard lowards deflation." For, the ty. The gold-losing country will be under legal compulsion to contract the cu iving fountry is not compelled by I 2 ency. Further, it is 0 contract eredit through bank rate policy and but it is difficult to ospand eredit and stimulate it. Thus, while the gold-losi y sufllrs doftation, the country may or may not experience inflation arded the gold standa narely in ¢ of @ uniformity in credit expansion or credit contraction in the participating countries, the gold standard mei