The MANAWATU DAILY Times TUESDAY, MARCH 17, 1936. Currency Stabilisation

Manawatu Times, Volume 61, Issue 64, 17 March 1936, Page 6

The MANAWATU DAILY Times TUESDAY, MARCH 17, 1936. Currency Stabilisation

The most remarkable feature of the four years .since Britain left the gold standard had been the stability of prices in that country, said Mr. Kupert E. Beckett, chairman of the Westminster Bank, addressing the annual meeting of shareholders in London. “Since we departed from the gold standard,” he said, “wholesale prices in this country as measured by the Board of Trade, have shown a variation of no more than ID per cent. In the United States, in the same period, wholesale prices have had a range of 29 per cent., in France one of hi per cent., in Germany 161- per cent., and in Italy 17A per cent. “Moreover, this price .stability has not been achieved as adherents of the gold standard once declared it could only be achieved —at the expense of violent fluctuation in the foreign exchange value of sterling. In fact, during the greater part of the four years there have been no such violent fluctuations, and last year, despite several scares in connection with the various gold currencies, the movements of sterling were within relatively narrow limits. It is, indeed, hardly too much to say that if legal stabilisation is not yet feasible, we are already enjoying a measure of dc facto stabilisation, a fact which I have pointed out on various occasions during examinations of exchange movements over a period. “It is significant, too, that freed from the shackles of the gold standard and with the substitution for that standard of a much less rigid system of monetary management, Britain has show'll, along with other non-gold countries, an industrial recovery Avliich compares remarkably with the position of the gold countries.” Money Cannot Create After noting important recent changes in monetary ideas, the chairman of the Midland Bank, Mr. Reginald McKenna, addressing the annual meeting of shareholders, dealt Avith another much-discussed aspect of the problem. He said that progress along this line had been sloAver than in banking technique, “The old conflict of opinion has by no means ceased, and perhaps never Avill,” he continued. “There is a natural tendency, when a particular course is recognised as bad, to jump to the conclusion that the opposite is good, whereas the truth may be that both are bad and that a middle line is the right ope. In past centuries sp much suffering had been entailed by repeated currency debasement that mankind, in recoiling from that evilwas blind to the opposite evil of undue restriction. “There is, moreover, the extreme difficulty of detached reasoning on the subject of money. The earning or ownership of money on whatever scale is such an important factor in our everyday lives'that we find it difficult to discuss money in the abstract. But theories on the total supply of money have nothing whatever to do with its distribution among classes or individuals. - “More than one exponent of monetary management has been misled into the belief that he has discovered a simplh method whereby every individual can be made better off Avithout working. Monetary management can do no more than remove obstacles in the way of industry and assist its expansion. It can help to extend the area of employment and bring production and consumption into better relationship; but, notwithstanding many dogmatic assurances to the contrary* it cannot of itself create wealth available for distribution.”.