GOLD STANDARD

Dominion, Volume 24, Issue 104, 27 January 1931, Page 9

GOLD STANDARD

Proposals to Restore Confidence

REPORT FROM LEAGUE By Telegraph—Press Assn.—Copyright. Geneva, January 25. The League of Nations Gold Delegation’s second interim report deals with the working of the gold standard. Attention is drawn to the fact that it has not dealt directly with the problem of whether there is a direct relationship between the present economic depression and the gold position, as the terms' of reference were drawn up before the depression, but it indicates the principles on which an efficient working of the gold standard depends. Five Measures. The report proposed a number of measures necessary to achieve beneficial distribution of gold, including:— (1) Granting monetary authorities powers to pursue the necessary credit policy to meet the circumstances, (2) An international agreement regarding the reduction of the existing minima of gold reserves in central banks. (3) The maintenance of the present general practice of not circulating gold coin. (4) Close collaboration between central banks. (5) The improvement of the mechanism for issuing foreign loans and promoting international transactions in existing securities. Processes are Slow. The report expresses the opinion that thv restoration of confidence could accelerate perhaps the slow processes by which political and economic causes affecting the distribution of gold after the war should work themselves out. It points out that the gold standard countries automatically, assume responsibility for conducting economic and financial policy, maintaining confidence, and facilitating the general working of the standard, but the automatic application of the mechanism is inadequate owing to post-war conditions, Increasing the number of occasions when conscious direction is necessary. These principles should lead to a more economic distribution of gold in future, assuming that political and economic conditions do not create disturbances that no monetary policy could hope to counteract.