EMPIRE VIEWS STATED.

Press, Volume LXIX, Issue 20920, 29 July 1933, Page 11

EMPIRE VIEWS STATED.

FUTURE POLICY. ADHERENCE TO PRINCIPLES | OF OTTAWA. | PARTIAL REALISATION OF i AIMS. i I ■nSTTJSII OFJ-'IL'IAI, WI.iULESS., 1 RUGBY, July 27. The following announcement was made on behalf of the British Empire delegations attending the World 3 i Economic Conference: ~ I "Now that the World Economic, ° I and Monetary Conference has ad- j journed, the undersigned delcga- ' i tions of the British Commonwealth ! consider it appropriate to put on i record their views on some of the more important matters of financial and monetary policy which were " raised but not decided at the conference. During part of the con- , ference they have had the oppor-! tunity of consulting together, and ' r reviewing in the light of present- , day conditions the conclusions ar-' rived at at the meeting of Ottawa, ' in so far as th*?y have reference | „ to the issues before the conference.! "The undersigned delegations are ; | convinced that the Ottawa agree- j £ ments have already had beneficial j , effects on many branches of inter-, Imperial trade, and that the pro- '■ . cess is likely to continue as the j . purchasing power of the various j , countries concerned increases. While I there has not yet been sufficient time to give full effect to the vari- . ous agreements made, they are con- j . vinced that the general principles.' , agreed upon are sound. ' "The undersigned delegations re- J J affirm their conviction that the j . lowering or removal of barriers be- J, : tween the countries of the Empire, j; : provided for in the Ottawa agree-1: ; menty will not only facilitate the ] " flow of goods between them, but j . will also stimulate and increase the j ( ; trade of the world. Policy Stated. j [ "The delegations desire to draw , : attention to the principles of " ' monetary and financial policie? ■ which emerged from the work both ! of the Ottawa and the World Con- ! : j ferences, and which are of the ! i I utmost importance for countries i, I I within the British Commonwealth. I; • The following embody their views! ■ • as to the principles of policy which]. ■ they consider desirable for their j - • countries: : ■ "At the Ottawa Conference the,; i Governments represented declared j, ■ their view that a rise throughout ; j the world in the general level of j, ■ wholesale prices was in the high- ; • est degree desirable, and stated that j ■ they were anxious to co-operate | i with other nations in practical , ■ measures for raising wholesale i- prices. They agreed that a rise in ' prices could not be effected by " monetary action alone, and it was 1 indicated that international action j " would be needed to remove the; j various non-monetary factors which " were depressing the level of prices. 1 "In the monetary sphere the prim- ; ' ary line of action toward a rise in - prices was stated to be the creation : 5 and maintenance, within the limits " of sound finance, of such conditions as would assist in the revival of enterprise and trade, including low rates of interest and abundaace of ' short-term money. "The inflationary creation of addi- ] tional means of payment to finance : public expenditure was deprecated, and an orderly monetary policy deI manded, with safeguards to limit , the scope of violent speculative [ movements of commodities and [ securities. j ' Encouraging Success. [ "Since then the policy of the J British Commonwealth has been directed to the raising of prices, I and the undersigned delegations! i note witli satisfaction that the policy j has been attended with an encouraging measure of success. For a time, months indeed, it had to encounter , obstacles arising from the continu-1 ' ance of the downward trend of gold | ; prices, and during that period the | „• results achieved were in the main j ' limited to raising prices in Empire I currencies relatively to gold prices. I "In the last few months the per- j " sistent adherence of the United fc Kingdom to the policy of cheap and . 1 plentiful money has been increas- ' ingly effective, under the more favourable conditions created for the time being by a change in the policy ; 1 of the United States, and by a halt ' in the fall of gold prices. Taking 1 the whole period from June 29, 1932, 1 just before the assembly of the Ottawa Conference, a rise in sterling wholesale prices has taken 1 place of 12 per cent., ac ,- -g to 1 the 'Economist' index. The rise in ' sterling prices for primary products ! during the same period has been ' much more substantial, being in the ' neighbourhood of 20 per cent. Views Unchanged. "The undersigned delegations are i of the opinion that the views they : expressed at Ottawa, as to the | '■ necessity for .a rise in the price ■ level, still hold good, and that it j 1 is of the greatest importance that j • the rise which has begun should j • continue. I f "As to the ultimate level to be j ■ aimed at, they do not consider it | practicable to state this in precise j terms. . . "Any price level will be satislac- | ' tory which restores normal activity ' to industry and employment, which ' ensures an economic return to the • producer of primary commodities. ■ and which harmonises the burden of debts and fixed charges with eco- ■ riomic capacity. . | "It is important that the rise in ; ; prices should not be carried to such ' a Ditch as to produce an inflated • scale of profits, and threaten the ' disturbance of equilibrium in the ■ opposite direction. They therefore • consider that the Governments of the British Commonwealth should nersist by all means in their power, whether monetary or economic, ' within the limits of sound finance, ■ m the policy of furthering the rise t n wholesale prices until there is evidence that equilibrium has been , ; re-established; and that thereupon

they should take whatever measures j possible to stabilise the position thus! attained. | "With reference to the proposal i which has been made for the ex- I pansion of Government programmes i of capital outlay, the British Com- ; monwealth delegations consider that j this is a matter which must be dealt > with by each Government in the light of its own experience and its own conditions. Aim of Monetary Polity. "The Ottawa Conference declared that the ultimate aim of monetary policy must be the restoration of a satisfactory international standard, in such a manner as to ensure the smooth and efficient working of international trade and finance. "The principal conditions precedent to the re-establishment of anv international monetary standard were stated to be particularly a rise in the general level of commodity prices in the various countries to a height more in keeping with the level of costs, including the burden of debt and other fixed and semifixed charges, and the conference expressed iis sense of tho importance of securing and maintaining international co-operation, with a view to avoiding, as far as was practicable, wide fluctuations in purchasing power or standard of value. "The delegations now reaffirm the view that the ultimate aim of monetary policy should be the restoration of a satisfactory international gold standard under which international co-operation would be secured and maintained, with a view to avoiding, as far as practicable, fluctuations in the purchasing power of gold. "The problem with which the world is faced is to reconcile the stability of exchange rates with a reasonable measure of stability, not merely in the price level of a particular country, hut in world prices. Effective action in this matter must largely depend on international cooperation and in any further sessions of the World Economic and Monetary Conference this subject must have special prominence. Empire Exchange Stability. "In the meantime, the delegations recognise the importance of the stability of exchange rates between all countries of the Empire, in the interests of trade. This objective will be constantly kept in mind in determining their monetary policy and its achievement will be aided ' by the pursuit o/' a common policy for raising price-levels. "International stability of exchange rates is facilitated by the fact that the Government of the United Kingdom has no commitments to other countries as regards the future of sterling, and retains complete freedom in this respect. The adherence of other countries to a policy on similar lines would make possible the attainment and maintenance of exchange stability over a still wider area. Among the factors working for the economic recovery of the countries of the British Commonwealth special importance attaches to the decline in the rate of interest on long-term loans. The delegations note with satisfaction the progress made in that direction." | SIGNIFICANT STATEMENT. | NEWSPAPER COMMENT. (Received July 28, 9.20 p.m.) LONDON, July 28. Commenting on the statement made by the Empire delegations to the World Economic Conference, the special correspondent of the "Daily Telegraph" descr'bes it as most significant, and that it constitutes the largest stable unit in the financial world to-day. Moreover, since other countries can join the finan- | cial unit, the British Empire demonstrates to the world that there is a third choice between rigid adi herence to the gold standard and i the isolationist policy of the United States—sterling supported with the full authority of the Empire.