NOTHING WRONG

Evening Post, Volume CXII, Issue 138, 8 December 1931, Page 7

NOTHING WRONG

"Kecognising this, the' countries which find 'a big market in Great Britain followed sterling, such as Ireland and the Scandinavian countries. The two Bhodesiahs have very wisely done tho same, and, in the interest of our producers, South Africa also should have done so. It is true that the Union Government would have had to pay a higher interest bill on part of its public debt, but, on the whole, as we are an exporting country, our producers would have benefited.

"And, after all,, the interests of our producers, especially the farmers, should have the first consideration at a time when agriculture in South Africa is passing through the hardest times it has known for a generation. WILL GO ANYWHEBE. "I lave frankly been unable to understand the policy of the Government in remaining on the gold basis since sterling left it. It hits the ' country very hard, and must add to the prevailing distress. And in the near future the gold basis will almost certainly have to be abandoned in any case. "It has been urged that as a gold producer we should have to set an example to other countries to remain on the gold basis, but the example of South, Africa leaves other countries in distress stone cold, and in settling out policy we had better consult the interest of our people. When normal economic conditions are again restored, there will in all probability be a general return to the gold standard, as no other satisfactory medium of exchange has yet been discovered; but our example to-day could do nothing to make the future of gold safer. "The whole of the British Empire except South Africa is off gold. Many other countries have had to leave it, too, and it almost seems as if in the near future only France and the United States, which sit with two>thirds of the gold reserves of the world, will be left on the gold basis. Their gold hoards and their gold basis may cripple their exporting industries, and prove a source of weakness rather than of strength to them. "The salient fact of to-day- is that world economy has become thoroughly international, and, unless gold is fairly distributed among the nations, it becomes a means of isolation, rather than of trade, for those possessing it. The original mistake of the South African Union Government inremaining on the gold standard is now made worse by the proposal to subsidise, agricultural oxports and obtain the necessary funds from the imposition of an import duty. As a subsidy to farmers a 10 per cent, bonus, of course, is inadequate, and the proposed import duty of 5 per cent. will go far to neutralise it, for the import duty when passed on to the consumer will probably not be very different in amount from that of the export bonus. One will largely cancel out the other, and the only people likely to benefit will be the army of officials who will be required to administer the now system. BENEFIT LOST. "The Government plan will be of no assistance to the farmers, and will have to be abandoned sooner or later. "The fear that sterling will be too erratic, and dopreciate too far, is surely groundless, and in any case if the vast resources of Great Britain cannot keep sterling on a fair and reasonable basis no quixotic attempt to remain on the gold basis will save South Africa. Certainly neither Trance nor the United States, with their gold hoards, and high tariff-walls, will save our industries. There is no doubt that low prices are the great evil from which agriculture to-day ,1s suffering. The fall in the pound means a rise ,in agricultural prices, but the policy of the , Union Government prevents Sguth African farmers from having the benefit of this rise. ,No amount of tinkering with bounties and duties can undo this. "Our producers should insist on getting the-full benefit from the rise in prices in Great Britain and^ a temporary abandonment of the gold standard." ■ :.■.-.... , Cape Provincial Councillors representing country constituencies are almost unanimous in that the Government's decision to remain on,the gold standard has caused immense hardship, especially among the wool farmers, says the <" Cape Times!" i\ .■ .-■ ; A few 'Nationalist members openly condemned the Government's action, and said that the proposed 10 per cent, export subsidy would only partly counteract the harm that had already been done. All agreed that, while agricultural conditions in most cases left little to be desired, the farmers could find no market for their products.' : UNPOPULAR. "Agricultural conditions in my district are splendid," Mr. A. B. Cunningham, M.E.C., the South African Party member for Uitenhage, said to a representative of the "Capo Times. ? J "Plenty of rain has fallen, and parts of the district had rather too much rain, which has damaged the citrus crops. Despite these favourable conditions, farmers are agreed, that the sooner we come off the gold standard, the better."