EUROPE'S FINANCE.

Auckland Star, Volume LIII, Issue 96, 24 April 1922, Page 5

EUROPE'S FINANCE.

BUDGETS MUST BALANCE.

RETURN OF GOLD STANDARD.

(By Cable.— I'ress Association.—Copyright.)

LONDON, April 2:1

The Australian and New Zealand Press Association's representative at Genoa says the financial commission has approved tbe sub-committee's report for presentation lo a plenary session of the conference. | n addition to the recommendations already published, the report declares that' it is desirable that European currencies should be based on a common standard. There should be a gold standard only, but so long as deficiencies in annual budgets are met by the creation of fiduciary money, or bank credits, no currency reform is possible, and no approach to a gold standard can be made. The balancing of budgets may require adequate taxation, but if Government expenditure is so high as to drive taxation to a point beyond what can be provided out of the" country's income, taxation may itself lead to inflation. Therefore, reduction in Government expenditure is the true remedy.

The report suggests an international convention to centralise control of the demand for gold. Credit should be regulated to maintain currencies at par with one another, also to prevent undue fluctuations in the purchasing nower of gold, although the discretion of the central banks should not be fettered by definite rules on the noint.— (A. and N.Z. Cable.)