TO STABILISE TRADE

Evening Post, Volume CXIII, Issue 98, 27 April 1932, Page 10

TO STABILISE TRADE

A REMEDY OF PROMISE

SIR JAMES PARR'S VIEWS

In the course of his address to Wellington business men last evening upon questions for discussion at the Ottawa Conference, Sir James Parr referred to the much discussed suggestion of a "managed" currency.

He had been discussing the great possible advantages of full development of trade within the Empire, so that trade, at present going to foreign countries, would in great part be diverted back to Empire channels, and continued:: "But what about the price? I am advised that there are signs of an upward lift in prices towards the end of this year. But there is another remedy to increase prices. It is to stabilise prices at the 1928 level by 'managing' our currency. Many wellknown economists are for using our money system in this -way. Men like McKenna and Keynes advocate it. They maintain that, with or without the gold standard, it would be possible to maintain the pound at a constant value measured in internal purchasing power. Of course, if this monetary change can be brought about without inflation so as to give us stable trade, and stable employment, and a stable cost of living, by all means let us have it.

"Can it be done?" he continued. "Every housewife wants a stable cost of Hying. Every wage-earner wants a stable cost of living, so that his wage may have the same value week by week. Every man who has any savings hopes for a stable cost of living, so that when he comes to use his savings in his old age they will still have thenfull value. Or, as it has been put by a well-known, writer, 'a steady price level would thus ensure justice in the fulfilment of obligations between creditor and debtor, between employer and workman, between the Treasury and the taxpayer.' BRITAIN'S POSITION. "If a 'managed' currency can succeed at all it ought to do so in Britain," said Sir James. "There (through the centralisation of the banking system) the Bank of England is placed in a favourable position to deal with monetary policy. A British 'managed' currency might suit New Zealand almost as well as an Empire currency, and would be more easily achieved. But if we engage in an Empire 'managed' currency in order to secure stability, it would be well to bring in the other countries, like Denmark, who have gone off. the gold standard. For otherwise a common Empire currency might not help our New Zealand primary producers, who would be in competition with these peoples. "Those who advocate an Empire currency are certainly supported by what has recently happened in. England. For England, since coming off gold, has maintained a currency stable in purchasing power. A year ago scarcely anybody would have supposed this possible. The danger, of course, lies in exchange fluctuations, and always there is the'risk of undue inflation which vneans ruin to everybody. DIFFERENCES OF VIEW. ■ "It must not be supposed that everybody is in favour of this system of achieving stability in our internal price levels," continued Sir James Parr. "Professor Gregory, who advises the Bank of England in economic questions, and fither experts are more than doubtful. Some fear that it might lead to uncontrolled inflation, and they aim at getting back to the 1 gold standard at a reasonably early date. "I am glad the . subject is on the agenda at Ottawa. One hopes that the discussion there may not be limited to the passing of a few formal resolutions, but that something practical will be done to help to cure the monetary ills of the British world. Britain should show a lead on so great and difficult an issue.

"I think with Mr. McKenna," concluded Sir James, "that 'deliberate, Bkilled, and resolute monetary management, with or without gold, is a sine qua non of steady economic progress.' "