THE PAGE QUICKENS.

Evening Star, Issue 21507, 4 September 1933, Page 8

THE PAGE QUICKENS.

'The rise in the price of gold, by latest advices at a premium of over CO per cent., may be welcome nows to those in the mining industry, but it is puzzling to those engaged in ordinary commerce. More sensational still is the prophecy from English quarters that within a measurable period gold may reach £8 per ounce. At the same time the dollar tends to approximate more to its legitimate relation to the pound, which is to say that it is following sterling in its rapid depreciation and at an accelerating pace. It appears ns though what the Continental cold block feared in the event of no agreement on currency at the recent World Conference is already in process, viz., an Anglo-American currency war. Wlmt would happen if this race in depreciation were to continue it would be unsali to attempt to predict. It is quite evident now that no attempt is being made by tho British authorities to hold sterling steady by means of tho Exchange Equalisation Fund. It is even doubtful if the desire to hold sterling steady now forms part of British monetary policy. At the same time, however, one notes that some hanking circles at least arc against unrestrained inllatioii arising

from competition between two siren t trading and industrial nations. . ording to a cable to-day the monthly review of the Midland Bank states that the time has come for considering again whether common action upon the pound and tho dollar being brought into prac tical association by a co-ordination ol British and American monetary policies is not tho next step towards world recovery. At tho moment it is claimcl that Britain’s “ expansive ” monetary policy is bearing good fruit in tho shape of increased production and reduced mi employment. The upward movement began in tho spring, and its continuance until autumn has induced confidence m its being no temporary affair but a clear beginning of positive recovery. It can honestly be claimed that Britain has genuinely tried to induce the nations to pull together to set the wheels ol international trade going again, but with indifferent success. She cannot be blamed if now she concentrates on her own affairs without compunctions as to the results of her policy on other countries, It may be that her " expansive ” monetary policy is a reply to America’s experiment in “ coding ” industry. It may even be that talk about tho pound being inflated until gold is worth £8 an ounce is intended as au indication to America as to the lengths Britain is prepared to go unless America is willing to listen to Mr Montagu Norman, whose visit to the United States wo assume to be to arrange some worn able association between the pound ami the dollar, preferably (if wo understand Mr Norman aright) with a close tie of each to gold. Concerning the develop ments of the past few weeks, one can only construe them as symptoms ot a race for markets—not merely between Britain and America, but with Japan very formidable among other competitors. If it is to bo a race conducted without a code of rules applying which used to apply when currencies were closely allied to gold, any thing may happen.