RE-ADOPTION URGED

Evening Post, Volume CVI, Issue 82, 16 October 1928, Page 10

RE-ADOPTION URGED

STABILISING EXCHANGE DOMINION'S EESERYE That New Zealand should return to the gold standard was urged at yesterday's meeting of the Associated Chambers of Commerce Conference; and it was suggested that as a step towards the stabilisation of exchange some of the Dominion's gold should be transferred to London. The following Canterbury remit was adopted on the motion of Mr. H. S. E. Turner: "That the executive of tho Associated Chambers of Commerce explore means of stabilising exchange on London and of preventing any recurrence of the exchango dislocations which occurred in 1921 and .1924, and for this purpose be authorised to co-opt Buch persons as they think fit." It had been intimated by the Hon. W. D. Stewart (Minister of Finance), stated tho mover, that the problem of stabilising exchange would arise in the near future, as the experience of Australia showed. In 1921 the Commonwealth could find no means of paying. London creditors, while in 1923-24 the very opposite position obtained, Australia having largo balances in London, which it could not transfer to Australia. The British Treasury officials suggested the adoption of the system in operation between Britain and Egypt since 1916. The great fluctuations in the net balances of the Dominion's import and export trade, indicated quite clearly tho causes of the exchange fluctuations a few years ago. TO STABILISE EXCHANGE. The gold standard, which acted as an automatic stabiliser of exchange, had been restored by most countries, said Mr. Turner; and New Zealand had the distinction of being one of the very few countries that had not yet returned to the gold standard. The proclamation passed ia 1914 had been extended again and again, but was due to expire on 10th June next. In effect, that proclamation prevented the free trading in gold which existed between other countries, and which operated to stabilise exchange between "the gold points," when it was cheaper to export or import gold than to buy or sell exchange. What the cost of shipping gold would be, he could not say; but he was of the opinion that it might serve, the purpose if a large part of New Zealand's gold reserves was held in London, because tho geographical position of the precious metal was not so important as its ownership. A rot-urn to the gold standard did not necessarily mean the resumption of gold cirenlation. Gold circulation had not been restored in Britain, whore notes were only convertible into bar gold in amounts above some £1700. BANKS COULD LEAD. By the restoration' of the gold standard, our banks could lead New Zealand back to much the same stability of exchange as had been achieved in Great Britain and many other countries. On the recommendation of its Economic Committee, the Canterbury Chamber had resolved that the Chambers of Commerce, in tho Dominion should work in harmony with tho bankers towards the solution of the problem of stabilising exchanges. Replying to a question by Mr. J. B. Richards (Stratford) as to whether the gold supply was now sufficient to meet world requirements, Mr. Turner stated that the modern practice was to ccono-: Jnise m the uso of gold. It was held in central reserve banks, no gold coin Ijomg- m circulation. ' To-day vcrv much less gold did more work than the gold owned before the war. There wore ample gold reserves in the Dominion. .•