NOT INTENDED.

Auckland Star, Volume LXIII, Issue 124, 27 May 1932, Page 7

NOT INTENDED.

RETURN TO GOLD.

Britain's Plan to Deal With

Fluctuations.

KEEN COMMONS DEBATE,

(British Official Wireless.)

(Received 12.30 p.m.)

KUGBY, May 20

The Finance Bill proposals to establish the £150,000,000 Exchange Equalisation Account was closely debated by the Commons in the committee stage of the bill last night. The purpose of the proposed account is to enable the Treasury to check and control currency fluctuations.

Provision is made for the Treasury to wind up the account when it considers such a course would be expedient, and there is a provision that in any event' it will be wound up not later than six months after the date on which last year's Act suspending the gold standard ceases to have effect. Several members resisted this proviso, protesting that it was contemplated to return to the gold star.dard.-

Major W. E. Elliot, Financial Secretary to the Treasury, gave the assurance that the Government had no intention whatever of going back to gold, at any rate while the gold prices were behaving as at present.

In future speeches it was suggested that the proviso was unnecessary, as the remainder of the clause gave the Treasury all the powers required, and Sir Robert Home (Con., Billhead, Glasgow) said the proviso gave the false impression that the intention was to return to gold at the old parity. He asked the Government to consider the whole question in the light of the debate.

Major Elliot said he could not disregard an appeal from a former Chancellor of the Exchequer, and he gave the undertaking desired. Buying of Silver Advocated. Mr. L. S. Ainery, formerly Dominions Secretary, moved an amendment to the Finance Bill to permit silver as well as gold to be bought by the exchange equalisation fund. He said this would not commit the Government to any farreaching scheme of bimetallism. The value of silver had been halved, with disastrous effects in the East.

A correction of the violent fluctuations would immensely improve trade with China and India. Only 10 per cent of the fund would be needed to buy the world's silver production in the present year to restore the price to the same level as in 1928.

Mr. Ainery said it was calculated that by 1941 there would be a shortage in the annual gold supply to the extent of £45,000,000 below requirements.

Sir Herbert Samuel, Home Secretary, in opposing the amendment, said the United States wanted silver currency because she produced three-quarters of the world's supply. Mr. Amery's scheme would not work.

The Minister of Health, Sir E. Hilton Young, in replying, said the subject would need to be discussed by the Imperial Conference before attempting the stabilisation of Britain's currency.

Mr. Amery desired to withdraw the amendment, but the Opposition challenged a division. Later, however, they allowed it to be negatived without a division.

Major W. E. Elliot, Financial Secretary to the Treasury, said his department had power to wind up the Exchange Equalisation Account at any time it might consider such a course expedient. Provision for establishing the account was made in the bill, which would enable the Treasury to borrow up to £150,000,000 to prevent the danger of a sudden, violent, fluctuation in the exchange value of sterling. If Britain returned to metallic currency the Government, of course, would wind up the account, but it had no intention whatever of going baek to gold, at any rate while gold prices were behaving as they were at present.