CURRENCY PROBLEM

Greymouth Evening Star, 12 March 1932, Page 8

CURRENCY PROBLEM

ym RW"i»»wr ■ '4 *> t-.. * •■> I ' STATEMENT BY CHANCELLQR. | [BBITI9H OFFICIAL WIBEUEBB.] (Received March 12, 11.45 a.m.) RUGBY, March 11. An important statement regarding the pou'fid sterling, and the merits of managed currency, was made by .the Chancellor of the Exchequer, in the House of Commons. The Chancellor 'declared that the Government did not desire to see the pound forced up to a rate injurious to industry. He could not foresee the ultimate time .or the rate of stabilisation, but took th‘e view that sooner or later, we must link currency to a, metallic basis. He saw nojietter basis than gold. It had been suggested, during the debate, that we might be forced back to the gold standard, and into buying gold, but the contingency was so remote .that it need not be considered. He thought that it was an entirely mistaken view, that the United States wpuld be forced off the gold standard. The measures taken there had been wisely conceived, and were having an effect in the United States, which might prove beneficial to the whole world. He agreed t|iat the fluctuation in the value of the pound was most detrimental, and that the speculation taking place in sterling was injurious and' disturbing to trade. Obviously, the of managing currency had diminished, when they had such an enormous volume of short-term money available throughout Europe. If they yere to manage currency, it would have to be done on a very large scale. As to the ultimate policy of the Government, he expressed a purelypersonal opinion. He was not attracted by the idea of managing currency, because, sooner or later, we wdujd find that we had to link currency to a metallic basis. Whether they should stick to gold, oi’ mix it with something that would help them out, he did hot know, but he did not see any better basis than gold, which in the past had served well. ’ Although for the tiine being, currency was inanaged, ft should not be assumed that the Government intended that it was going th be a permanent policy. The Macmillan Committee came very definitely to the conclusion that, if there were management, it ought hot to he in the hands of a central banking institution. With that, he freely concurred.