THe Guardian And Evening Star, with which is incorporated the West Coast Tunes TUESDAY, JANUARY 20, 1932. PRICES AND GOLD.

Hokitika Guardian, 26 January 1932, Page 4

THe Guardian And Evening Star, with which is incorporated the West Coast Tunes TUESDAY, JANUARY 20, 1932. PRICES AND GOLD.

Bmtain lias issued an appeal to “the great gold-holding countries” to play their part in tho reconstruction of the world’s financial system by making an attempt “to restore price levels.” Their prices in general are very largely dependent on the amount of currency in circulation is admitted almost universally. But so far the Powers have apparently been reluctant- to draw the natmal and necessary inference that the economic conditions of the world may be- changed radically for the worse by the hoarding of gold. It need hardly, be said that the British Government n.-.s plenty of expert authority available to endor-se its proposals. The- facts and the conclusions that follow inevitably from them are not unfamiliar, for they were put plainly befo.e the whole world at the Genoa Conference -ten years ago. At- this gathering of economic and financial experts a number of resolutions were passed affirming the relation between price levels and gold, and recommending that the Powers should take certain definite steps to deal effectively with the world-wide economic depression. These proposals included international action to secure a distribution of gold and the credit money based upon it. in accordance with the economic needs of the various countries .concerned, and also to stabilise prices by expansion or contraction of the currency with the rise or fall of index-numbers. As a general rule, comments the ‘Auckland Star, politicians pay little attention to the warnings of economists, and for the most- part the recommendations of the Genoa Conference were simply set aside. Writing quite recently on tho Gold CTisi-s, Air Pethiek-Luwrence, who was financial secretary to tho Treasury in the late Labour Government, charges the Powers with neglect of their duty in ignoring the proposals of the Genoa Conference, and maintains that tho various Governments cannot- plead that they are free of all responsibility for the present worldwide depression till the expedients recommended at Genoa have been tried and have failed- But it must be recognised that, while there are sound reasons for the redistribution of gold and the regulation of prices, tho practical obstacles in the way of such policy seem almost insurmountable. Nearly two-thirds of the world’s stocks of gold are in the hands of France and the United States, and to secure a diffusion, of these enormous hoards America and France must be convinced that such a course will benefit them specifically and individually. But the Americans regard their lingo stocks of gold as the sign and symbol of 'their commercial and financial stability, and the French fear that, if they surrender any portion of their treasure, they will lose their strongest security against future political and national dangers. However, it is generally conceded that for the time being, these huge but sterile heaps of ttie precious metal can serve no useful purpose, and therefore there is some reasonable hope that the policy ot distribution and management now advocated by Britain may be accepted by France -an-d America as well.