GOLD CURRENCY.

Northern Advocate, 18 June 1923, Page 4

GOLD CURRENCY.

In the course >of his address to the shareholders of the Bank of New Zealand Sir Gorge Elliott remarked that it was thought in some quarters that when the rate of exchange between | London and Now York reache'd somewhere near par gold would again come into circulation. In his opinion, howover, it will probably be many years before gold again circulates freely. | The idea that the improvement in the J dollar rate of exchange would restore I the gold monetary standard seems to j be widely held, and the results of the .restoration e'ertainly would "be very good. It would have an important effect in the way of stabilising prices and facilitating and extending trade. In one respect, however, the return to the gold standard is likely to be disappointing to most people, for, as Sir George Elliot has pointed out, it is not by any means certain that the restoration of the standard would mean the free use of gold as currency. An economist of international standing, Professor Gustav Cassell, observed in a recent article that a general demand for gold would undoubtedly involve the risk of an increasing scarcity of the metal (such a scarcity, of course, would have a disturbing effect on prices.) The restoration of the gold standard, Professor Cassell added, i must therefore be accompanied by dej liberate economy in the use -of gold j for monetary purposes. This economy, | he thinks, cannot, as was recommnded [ bv tho Genoa Conference, be restrict: ; ed to limiting the accumulation of .sold I reserved, but must be extended to enI tire abstention from the use of gold I for the circulation of gold coin. This | is not. perhaps, tho last word on the but undoubtedly there are and will be for a time to come very strong argument* against reverting to the use of gold coinage. The principal advantages of a gold standard are, of course, attainable without using gold in ordinary circulation, and a gold currency costs considerably more to maintain than the alternative of paper notes does.