MR NASH AND BANKING

Press, Volume LXXIII, Issue 21990, 14 January 1937, Page 4

MR NASH AND BANKING

TO THE EDITOE OF THE PBBSS. Sir, —Possibly your correspondents, Mr D. C. Davie and Hiram Hunter, noticed an item of news in your columns a little while ago to the effect that Mr Morgenthau, the American financial expert, had advocated the partial withdrawal of gold to prevent the banks from unduly expanding credit and creating a boom with its inevitable reaction. This would seem to be a step in the right direction, especially as it implies the possibility of releasing gold when a depression seems imminent. This by the way. The conclusion to be drawn from the above item of news is that gold is still one of the controlling factors in currency. It is agreed on all hands that some kind of banking control is necessary, and it does not greatly matter who was the first to discover it, but are we all quite clear as to the, part that gold plays in this control?’ Has any scheme for the issue of cur-? rency been devised which can ensure; value for its tokens apart from _ goldJ or, alternatively, some kind of inter-*/ national agreement as to the gold content of its notes? This question has been asked before, but so far I have not seen a satisfactory explanation. The present system, as your correspondents have pointed out, is eminently unsatisfactory, but it will not be possible to make progress if real difficulties are left unsolved.—Yours, etq. ANALYST. January 13, 1937.