GOLD RESERVES

Manawatu Standard, Volume L, Issue 283, 25 October 1930, Page 8

GOLD RESERVES

What better evidence could there be of Sir Otto Niemeyer’s statement that world trade and industry are becoming more and more international? Trade cannot be wholly on one side, a fact which has been brought home to the United States more than once this year. Even in June, according to Senator Swanson, her exports reached the lowest monthly level in six years, and he uses this fact as evidence that the campaign against the new tariff commenced months before it actually became law. America is the great creditor nation of the world with command over a vast supply of gold. Nations in debt to her cannot pay in goods so they must do so in gold; others who seek to trade with her are confronted with impossible tariffs. France also is piling up a huge gold reserve. Today the gold in the vaults of the Bank of France has reached £400,000,000, an increase of nearly £50,000,000 since July. “Why is it that France is getting all this gold?” asked the London Daily Mail. “One of the chief reasons is that France has a scientific tariff and we have not. The French tariff is so adjusted as to. restrict imports which would dislodge French workers from employment. Consequently France imports much less than we do, and she has practically no unemployed. She has preserved a prosperous agriculture and can feed herself with a little effort. We, on the other hand, have allowed our agriculture to be wrecked by dumping.” The stability of the value of gold in relation to commodity prices is a most important world problem, and, as Sir Otto Niemeyer pointed out, it is obvious that unless there is a measure of agreement between central banks as to the amount of gold they respectively think it necessary to hold there will be. a scramble for what gol'd is available, and consequently a growing danger, as the prices of gold rro up, of commodity prices falling, to the ultimate disadvantage of nil parties. The Bank of International Settlements which is already playing 1 an important part in international finance is expected to greatly assist in the policy of closer co-operation between the central reserve banks in this matter.' ■