The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News, The Echo and The Sun. THURSDAY, SEPTEMBER 25, 1930. GOLD AND FINANCE.

Auckland Star, Volume LXI, Issue 227, 25 September 1930, Page 6

The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News, The Echo and The Sun.

THURSDAY, SEPTEMBER 25, 1930. GOLD AND FINANCE.

For the cause that lacks assistance, For the wrong that needs resistance, For the future in the distance, And the good that we can do.

The report of the Financial Committee of the League of Nations on the world's gold supply is one of the most important economic documents yet issued from Geneva. The report confirms the opinion, now widely held, that the world's supply of currency is inadequate for the requirements of trade and exchange. Apparently there will be an increase in the output of gold for four years, but after this a steady decline is anticipated. This, of course, means that unless the various precautionary measures suggested are successful, the world is doomed to suffer a further prolonged fall in prices parallel to the decline in price levels between 1875 and 1895 occasioned by the demonetisation of silver. But it should be carefully observed that the report clearly indicates the probability that the concentration of gold reserves in central banks, and the restriction of its use for international payments, may have the effect of counteracting the threatened depression and saving us from Deflation and all its attendant evils. But the most interesting feature of the report is the suggestion that it may be found possible to regulate the volume of currency, and therefore the level of prices throughout the world's markets, by co-operative action between the great financial centres. This idea was worked out with a large amount of apt and convincing argument and illustration by Sir Otto Niemeyer in his speech at Wellington yesterday. Sir Otto regards the whole question of prices and their relation to currency as an international problem, and he looks forward to the time when, through the cosmopolitan organisations now established at Geneva and the Bank for International Settlements operating at Basle, it will be possible to prevent that "scramble for gold" which is now the chief ca,use of violent fluctuations in price, and thus to protect the whole world against the constant menace of alternating Deflation and Inflation. .This view of the possibilities of international co-operation in the field of finance offers the best prospect of relief from prevailing economic evils ever set before the civilised world.