RETURN OF PROSPERITY

Evening Star, Issue 21099, 11 May 1932, Page 7

RETURN OF PROSPERITY

BRITAIN'S MONETARY POLICY THE GHAMGELLOR OPTIMISTIC frta Association— By Telegraph — Copyright. LONDON, May 10. The Chancellor of the Exchequer (Mr Neville Chamberlain), replying in the House of Commons to a discussion on the MacMillan Report, said that Britain could not expect by the manipulation of sterling to be certain of guiding the prices of commodities, as it wished. He had already stated the general objective of Britain’s monetary policy. The Government desired to see a rise in wholesale prices in order that industries might once again make profits. Several factors would affect wholesale prices, first, the tariff itself, which must bo subject to what happened to gold elsewhere; secondly, the exchange value of the pound, which the Government did not desire to see rise above the present level; and, thirdly, cheap money. Ho doubted whether, a lower bank level than the present would result in reducing the rates on bills and overdrafts. In the absence of serious disturbances in other countries he saw no reason why there should not be a continuation of the cheap and plentiful supply of money. For these reasons. he would not take a pessimistic view of the future. He believed that with the aid of the tariff there would be a return of confidence and prosperity. The Government had been criticised for not moving fast enough, but no Government in modern times had brought about such a rapid change as that which had recently taken place. Let the House wait till the conferences' were over, and Ministers had had an opportunity for hard thinking on the subject of drastic economies. Then it would not be disappointed. INTERNATIONAL ACTION URGED MR WINSTON CHURCHILL'S CONTENTION. (British Official Wireless.) RUGBY, May 10. (Received May 11, at noon.) During the second day’s debate in the House of Commons on the second reading of the Finance Bill, the Government announced that at present a currency conference could not be called. Mr Winston Churchill made a strong demand for international action on the money problem. Capitalist civilisation, he said, was adrift, and no single Power was strong enough to take the helm. The strength of three or four of the greatest Powers would be required. He did not believe that individual unrelated inflation or individual inflated credit expansion by various nations would solve the difficulties, . International action?to arrest the fall in .prices was the sole hope of averting a world crash, and he urged the Chancellor of the Exchequer to reconsider his decision. Mr Churchill added : “ I regard international action to arrest the fall of prices as the sole hope of averting a world crash, compared with which everything we have suffered to date would be a mere nothing, and no such action can be taken except through the co-operation of Britain and the United States.” «■