The Guardian And Evening Star, with which is incorporated the West Coast Times SATURDAY, JANUARY 7, 1933. THE GOLD STANDARD.

Hokitika Guardian, 7 January 1933, Page 4

The Guardian And Evening Star, with which is incorporated the West Coast Times SATURDAY, JANUARY 7, 1933. THE GOLD STANDARD.

It is believed that one. of the obstacles of the Holding, of the Would Eicon cun io CdnleTci.xce is the refusal, of coautnes off the gold standard, and ! particularly .or Great Britain, to outer into pledge's for the re-u.-.taolishmcnt of the standard. The demand is not matte so bluntly as the p.ev.ous sentence would seem to imply, but, nevertheless, it is known that the United State's .and Franco are pressing for th-e re-establishment of gold in. Britain as a preliminary to the World Conference. The ‘ •Economist” has resulted in terms the .case—overwhelming in its opinion—.against an uncoilcji.ior.al restoration of the gold standaid by Great Britain. The obvious condition precedent is a settlement of tvajrj de./tis, but granted ’that .realised, there are, in its view, compjlling objections against Great Britain taking the responsibility of attempting to mantain any parity with gold unless and until certain condit.ons • are realised, some of which involve very definite assurances o;i the part of t..e I rest of the world. The to..diuons the ■“Etoiioniiß” suggests are somewhat on the following lines: —(l) Tuat there must first be some recovery from the present depressed level of wholesale prices: to this end the policy of central banks—aided by complementary policy on the part of Governments—should he to put no’obstacle in ti e way of such a “movement, but rather to , assist it. '(2) I'll at the excessive concentration of gold in a few count; ies of the world must first be corrected, if the trade balance of th© countries concerned does not become sufficiently adverse .to produce this result, it must be achieved either .by loans from the go'd-arcumulating countries, or by utilising sp.me part of the accumulations as an international reserve. (8) That there' must be sufficient common action, in the monetary policy of the chief countries of the world to ensure that future gold movements are allowed to influence price levels and go correct the balance of .payments, i.e., that gold-receiving countries will not sterilise gold in order to obviate a rise in. their 'internal costs, There must also he adequate information regarding short-term capital movement's from one country to another, so that there may he adequate warning when the situation in any country is becoming unduly vulnerable. (4) That a general agreement be reached for the removal of trade impediments and the inauguration of a more liberal commercial policy, including in particular an undertaking by creditor countries that they will refrain from placing, in the supposed interests of their domestic employment, obstacles in the way of their acceptance of a logical import surplus. We are convinced that it would be an unwarrantable risk for this country to go back to gold if it involved the possibility of having to hold to that standard at the cost of indefinite deflation. We go further; we would say that unless there is a, recovery of commodity prices the world is faced with the task of making readjustments of debts, fixed charges, and rents on a scale that could orly he carried out with the utmost difficulty and probably at the cost of grave social disturbance, but which would have to be earned cut if civilisation is to survive. The experience of the past year suggests that if it is to be a contest of endurance, whose result is to determine whether saner commercial and monetary policies shall prevail, Britain need have little fear that she will prove the weaker. The deterioration of trade, employment, and budgets has linen more serious during the past 12 months in the ‘gold’ countries t’ an in Britain or other countries in which the gold standard lias been, suspended. F it he the case, as we fear it is, that the world as a wl.i.qlo, has... l'wned ! the lesson tlifit the suocef»«iiil working of an., intern at'.owil monetary (standard based on gold is dependent on \ a re'sonahle freedom of movement W goods and the renunciation of poi’.ietes which have the effect of sterilising large quantities of the met'd which fs the base of the, iwerr.Htionnl syi-teni. tlion there is no option but to allow further time lor bitter experience,