GOLD AND EXCHANGE

Evening Post, Volume CXII, Issue 124, 21 November 1931, Page 16

GOLD AND EXCHANGE

AUSTRALIAN VIEWPOINT

POPULAR EXPOSITION

•Evening Post," 21st November

Professor Copland and Mr. G. L. Wood, Associate Professor of Commerce with him at the University of Melbourne, realised the popular interest aroused by the "monetary problems in these troublesome times." They delivered lectures in Melbourne on "Australia and the Gold Standard," two by Professor Copland and one by Mr. Wood. The subjects o£ the former were "Gold as an International Standard" and "Australian Exchange and the Future of Gold"; and the latter lectured on "The Breakdown of the Gold Standard." The publishers are Messrs. Kobertson and.Mullens, Melbourne. Professor Copland shows that the medium of exchange in the modern world is currency and credit, not gold, which is but the standard of deferred payments. As a standard gold is unstable, but it ha-1 been adopted by the nations because it had been produced in sufficient quantities in comparatively recent times. Reference is then made to the report of the gold deflation of the Financial Committee of the League of Nations, to show demand is likely in a few years' time to outstrip supply. The history of Great Britain under the gold standard since the restoration in 1925 is outlined, and especially the non-fulfilment of hopes it inspired that changes that had taken place in the banking systems of many countries would enable the international price level to be maintained. But confidence had been shaken by the accumulation pf 60 per cent, of the gold of the world in two countries. Comparison is made as follows: —

June. June,

1924. 1931. Million Million

Country. United States France

dollars. dollars,

4095 4593 710 2212 624 793

United Kingdom

Most countries endeavoured to increase their reserves, but not necessarily to "a deliberate policy of amassing gold," as Professor Copland observes, but to other influences to which he refers. Gold for the moment is no longer the international standard. The maintenance of the standard by Great Britain was beset' with difficulties, as the professor shows. He gives two main reasons why a return to the gold standard is likely, and examines four future courses of -action, which may be summarised ■as payment of lang-term debts in terms of value of commodities; restoration of the international gold standard; "symmetalism" or the use of bars of gold and .silver mixed, a variant of bi-metallism; or leaving sterling on its present basis. But whatever course is taken the problem of better international management of the gold standard will remain. Stress is laid upon the necessity for restricting the supply of credit in good times. So far as Australian exchange is concerned, Professor Copland gives a lucid explanation of the mechanism and shows how the current high rate brings needed relief to the exporter-producer and how tor the immediate future the disadvantages of the present rate are small compared with the advantages. Mr. Wood deals with "The Breakdown of tlio Gold Standard," and his work is especially valuable as a synopsis of recent history, and urges that the time is now fully ripe for convening an Imperial Monetary Conference as a prelude to constituting "an Empire Finance Council charged .with the mobilisation of Imperial resources, the maintenance of Britain's financial prestige, and the closer identification of British j and Dominion economic interests." J