THE GOLD STANDARD.

Matamata Record, Volume XVI, Issue 1446, 31 July 1933, Page 5

THE GOLD STANDARD.

HAS BEEN A HANDICAP. London Paper’s Comments. “The gold countries were the last to feel the coming of the depression, and the reason that they are now feeling it more severely than the others is that a purchase from them involves payment in gold or in terms of gold,’’ says “The Times” Financial Review of 1932. “That is to say, if one wishers tb purchase an article from a gold standard country, in the last resort one has to obtain gold tb pay for it. Since gold is the dearest commodity to buy in a world in which everything else is cheap, it is obvious that everyone endeavours to buy in a country which is not on the gold standard. Thus the export trade of the gold standard countries is quickly diminishing and unemployment rapidly increasing. It is true that the export trade of the paper currency countries is not increasing, but it is falling much less rapidly; in some cases exports are being relatively well maintained. Great Britain, the chief non-gold country, has been able to alleviate the worst pains of the crisis through having kept in reserve untouched two devices of amelioration and relief which other countries "had already used—namely, devaluation of currency j.n terms of gold, and a protective tariff. . . . When she did decide to use them they brought relief at a moment when ft had become urgent and imperative. The protective tariff brought succour to famished trades and industries when they were almost on the point of collapse. It reduced imports, as also did the depreciation in sterling; but the latter at the same time stimulated exports. In combination these two factors were so large as to bring unquestionable benefit to the country. The fact that America has the largest army of unemployed and the largest stock of gold should help her people to realise that monetary abundance Is not by itself a cure for anything.” “The Times” review adds. “Many and varied are the views held about the gold standard and the part it Is alleged to have played in bringing about the world crisis. The events of the past year have helped to clarify some . of these views. There is no longer a common monetary standard; each country has its own. Not even the most bigoted gold standard advocate can claim that the position of the gold countries is at present any better off than that of others which are off gold. On the other hand, the non-gold countries while they have sought relief in a paper standard have not found it synonymous with prosperity. There is no magic in either gold or paper. Yet it is undeniably a fact that when the world generally used one monetary standard trade was larger and more profitable than it is to-day. That does not mean that the economic crisis is due to the abandonment, of the gold standard, but rather to the causes which brought about that abandonment namely, a vast inflation of debts of all kinds, distortion of contracts, prices, and costs of production, the destruction of old channels of trade, and the obstacles that have been placed by almost every naJ tion in the way of rebuilding those channels.”