EMPIRE CURRENCY

Greymouth Evening Star, 10 March 1933, Page 5

EMPIRE CURRENCY

“NOT PRACTICAL POLITICS.”

[by CABLE PBEBB ASSN. —COPYBIGHT.]

LONDON, March 9.

In the House of Commons Mr S. S. Hammersley (Conservative) submitted a motion demanding that the Government, without waiting for any international consideration of gold prices, should give effect to a wholehearted policy of raising sterling prices.

Mr Leopold Amery seconded the motion. He said that the Government had at Ottawa, missed a great opportunity of linking an Empire fiscal policy with an Empire monetary policy. He appealed for bold, encouragement for promising new industries ’find for Government assistance also to build a new Cunard liner, and for electrification of the railways, with help of a subsidy.

Mr Chamberlain, in replying, said that an Empire monetary policy was •‘not practical politics.” Such a policy would mean that the Dominion would have to accept Britain’s control of the value of sterling. Sterling prices had remained remarkably steady though gold prices in the United States had fallen by 20 per cent., in France and Italy by 12 per cent, and in Germany by 16 per cent. He thought that these facts showed that Britain’s monetary policy had countered the effect of world forces. The foreign trade of Britain had been halved during the last few years. The idea, however, that all this fall could be replaced by any stimulus to the Home trade was doomed to be disappointed. The taxpayers’ money was to be used to grant subsidies for selected industries, Would not other countries take steps to counteract such subsidies? The hard fact was that Britain could not prosper while the whole world was depressed. The International Economic Conference agenda contained most of the problems which must be solved before world prosperity would be attainable. Mr Hammersley’s motion was carried by 12S votes to 25.

PRICE LEVELS AND POLITICS

[official wireless.]

RUGBY, March 9.

A motion asking for a policy to raise wholesale prices was debated in the Commons.

Mr. Chamberlain again asserted there would be no precipitate return to the gold standard. Replying to criticism that the Government had missed a great opportunity at Ottawa to csttablish an Imperial monetary system, he said the immediate difficulty was that the Dominions would have to grant power of fixing the rate of sterling, which they would have to accept without having any control. It was conceivable that what suited 1 Britain at the particular moment would not necessarily suit the Dominions.

Referring to the fall in wholesale prices, he said they had diminished since October 1920 by one-third, and in the case of raw material by fifty and sixty per cent. This practically destroyed the purchasing power of a number of countries. The fall in primary products was much greater than the fall in manufactured articles, and the fall in wholesale prices much greater than the fall in retail prices. The effect, of this was that countries had been unable to purchase the goods which Britain produced. Wholesale sterling prices remained remarkably steady, particularly when compared with those in countries on the gold standard. This showed that we were in the presence of world forces, and that, by some means, largely by the monetary policy pursued here, we had countered the effect of these world forces, so far as sterling prices were concerned. He did not believe that it was possible to raise sterling prices by monetary action alone. As long as the world was in a disturbed condition, when no one knew what political changes were likely, or what financial difficulties other countries might, lind themselves involved in. they could not expect international trade to resume former volume. He did not believe that any artificial stimulus could restore tho volume of international trade which must depend upon improving world conditions.