The Grey River Argus WEDNESDAY, October 14th, 1936. NEW GOLD STANDARD.

Grey River Argus, 14 October 1936, Page 4

The Grey River Argus WEDNESDAY, October 14th, 1936. NEW GOLD STANDARD.

More than the mere London suggestion of a return eventually to the traditional gold standard is necessary to give such a meaning to the so-called new gold standard just announced. There are, no doubt, going to be exchanges of gold, but the monopoly of gold by Governments is going to remain. It is significant, also, that the fullest details of the arrangement should be coming, not from London, but from Washington. The essence of the thing is that the Governments of America, Britain and France ar c going to harmonise the funds they have set up for th c purpose of keeping a fairly regular ratio as between their respective currencies on exI change. That is about all there is to it, and th e modus operandi is going to be that of day-to-day adjustments. These will be regulated by reference to several things, such as the demand for gold, the variations in holdings of the respective currencies by th e several Governments concerned, and other factors. The Americans announce that individuals will be unable to deal on exchange in gold, the only shi}> ments being thos P of the Governments. It is noteworthy that this new gold standard is entirely in accord with the new’ currency policy of New Zealand. It exemplifies the extent to which State

control of currency has come about in the international sphere.

The same principle applies also 1o the internal monetary system of America. That the agreement has the endorsement of that Government is itself a demonstration of the fact that a radical alteration is coming into being. More stable exchanges may be calculated to favour som P restoration of international trading, though it may be noted Britain is about to lend some millions to China which will take the form of com-

oditios. There is a constant plea for the removal of barriers to international trading, but some who make it are thinking as muck of I lending as of the interchange of commodities. It is hard to find borrowers, when monetary values remain uncertain, but it is infinitely worse for genuine trading tvhen commodity values are rendI ered uncertain by monetary manipulation. The going of sterlingoff gold early in the slump was the outcome of international economic dictatorship by the controllers of money. They have never since wielded the same power, and the indications are they never will do so any more. We have heard a lot about the New I Zealand G-overnment being out of step with other countries in currency policy, but every day shows this country’s initiative has simply anticipated the course of progress towards truer stability. The degree, indeed, to which Governments are now going to manage the exchanges is such as to foreshadow a complementary development in the sphere of internal currency. It is high time, indeed, that there was an end to th c dictatorship of those private interests whose control of wealth had made them more powerful than Governments. i