UNIFORM MONETARY SYSTEM.

Auckland Star, Volume LXIII, Issue 72, 26 March 1932, Page 4

UNIFORM MONETARY SYSTEM.

FOR BRITISH EMPIRE. Among the subjects to be considered at the Imperial Economic Conference in Ottawa is the important question of one uniform monetary system. A report adopted by the council of the Federation of Chambers of Commerce of the British Empire contained the following statement regarding a uniform monetary system:— "Owing to the accumulation of gold in the United States and France, due to their unwillingness to accept payment in goods or services, there has been a steady contraction of currency in active circulation everywhere, in an endeavour to attract fresh gold or retain existing stocks. Whilst most Empire countries are now off the gold standard, and the struggle to attract or retain gold has ceased, they are, nevertheless, obliged to continue to force down prices by currency contraction, in order to remain competitive in world markets. Every contraction by one nation is followed by contractions in others, so that the advantage which the first hoped to gain is promptly neutralised by the action of the rest. All then are once more in the same relative position, but on a lower and worse level. In this way, prices of foodstuffs and rawmaterials have been depressed below the cost of production, and the purchasing power of 91 per cent of the world's population has been reduced. So-called oycrproduction is, in fact, imder-eonsumption, owing to restricted purchasing power.

"No one nation can stop this progressive deflation, because any one nation which attempted to increase its currency in active circulation, pay a reasonable price to primary producers, and raise the purchasing power of its people, would put itself out of competition in world markets. Whilst no one nation can do it, there is only one group of nations sufficiently large and sufficiently self-con-tained, which could, and that is the British Empire, representing one-quarter of the population of the world and containing within it all things necessary for life. It would, of course, be essential, whilst the Empire countries were again expanding their currencies and raising their prices to a profitable level, to insulate themselves from the competition of outside nations which continued on a deflationary course. If once a uniform monetary system were in force in all Empire countries, it should not be difficult to devise machinery for close collaboration between their respective central banks, which would enable timely steps to be taken to keep the balance of payments between them in equilibrium, and so substitute sane co-operation for insane and suicidal competition."