THE GOLD STANDARD.

Auckland Star, Volume LXVI, Issue 7, 9 January 1935, Page 6

THE GOLD STANDARD.

I cannot join "H.W." and other inflationists in congratulations on what has proved to bo a misfortune to Britain, the Empire and the world at large in the suspension of the gold standard by so many countries, which unfortunately is not a meVc fetish of bygone days, as "H.W." suggests. The chaos in international trade and finance to-day is proof that sold is still the sheet anchor of international currencies!. In 1&30 Britain was pledged through being on the gold standard that should anyone of any nationality deliver a-.i ounce of gold to the Bank of England he was entitled to receive through the bank from the producers of Gre\t Britain £3 17/10J of their goods and services measured by sterling. To-day those same producers are called upon to render a service or goods to the amount of £7 for the same ounce of gold, also measured in sterling. Perhaps "H.W." can see some advantage in this condition of affairs, but 1 must confess I fail to do so. If lie would like to prove this contention, then let him possess himself of an ounce of that much-despised commodity, gold, and he will find he can demand £7 in British goods and services, or £10 in New Zealand. "H.W." is evidently unaware that those people who support the return to the gold standard do so as a protest against the heavy toll that is being made by gold on the goods and services of the peopleof all countries. It can be truly said to-day that the producers of the world are being crucified on a cross of gold, but this could not be said when nations were on the gold standard. Gold standardise are anxious to check this state of affairs and restore to all people a more equitable and just standard of exchange. Both America and Britain have realised this. The American Congress last year authorised President Koosevelt to buy and sell gold as freely ae he desired at a fixed price of 35 dollars per ounce. This means that the Congress pledged the American producers to supply 3j dollars of American goods for every ounce of gold delivered. Likewise Britain, by the establishment of her stabilisation fund" of £37r>.000,000, was able to held in foreign currencies, securities and goid, arresting the flight of the British pound, and has been able during the past twelve months to hold it reasonably stable at £7 an ounce. Both America and Britain are therefore unofficially restored to the gold standard at a new valuation. In face of these facts, it is dangerous and futile to refer to the gold standard as a "fetish of bygone days." J. HISLOP.