THE GOLD STANDARD.

New Zealand Herald, Volume LXIX, Issue 21131, 14 March 1932, Page 9

THE GOLD STANDARD.

BRITISH ABANDONMENT. BILL TO EXTEND PERIOD. TO DATE. CURRENCY QUESTION REVIEWED By Telegraph—Press Association—Copyright. (Received March 13, 5.5 p.m.) LONDON, March 12. The precautionary re-enactment of the Gold Standard Amendment Act for one year was moved in the House of Commons by the Parliamentary Secretary to thu Bourd of Trade, Mr. L. Hore-Bclisha. The mover said that happily the predictions of food exploitation under the Act had been falsified. Indeed many gold countries had linked their fortunes and prices with those of Britain and as a result 50 per cent, of the food now imported was from non-gold countries. To that extent the possible damage to Britain's household Budget was restricted. Furthermore tho strength of Britain's purchasing power abroad had induced some countries to adjust themselves to Britain's purses. Wholesale prices in the gold countries had fallen 9 per. cent., which further restricted (lie area of damage. Many foodstuffs, including Australian and New Zealand butter, were cheaper. The average reduction ori all foodstuffs was 10 per cent, compared with 1930. Mr. A. M. Samuel (Conservative — Karnham, Surrey) urged that there should bp. power to defend Britain. If an abnormal influx of gold were forced upon her it might have peculiar results, even forcing her back to gold if there were a (light of the franc or dollar. Metallic Basis Sooner or Later. The Chancellor of the Exchequer, Mr. Neville Chamberlain, then made an important statement. He said the Government did not desire to see the. pound forced up at a rate which would be injurious to industry. Mr. Chamberlain said he did not foresee an ultimate time or rate of stabilisation, but be took the view that sooner or later Britain must link her currency to a metallic basis. He saw no better basis than gold.

It had been suggested during tho debate that Britain might be forced back to the gold standard and into buying gold, but that contingency was so remoto that it need not be considered.

It was an entirely mistaken view that tho United States would be forced off the gold standard. The measures taken there 1 had been wisely conceived and were having an effect in the States which might prove beneficial to the ■uhole world.

The Chancellor said he agreed that fluctuation in the value of tho pound was most detrimental and that the speculation which was taking place in sterling was injurious and disturbing to trade. Management of Currency. Obviously the power of managing currency had been diminished when they bad such an enormous volume of short-term money available throughout Europe. If they were to manage currency it would havo to be done on a very large scale. As to the ultimate policy of the Government, Mr. Chamberlain expressed a purely personal opinion. lie said he was not attracted bv the idea of managing currency. Whether they should stick to gold or mix it with something that would help them out he did not know, but in the past gold had served them well. Although for the time being the currency was a managed one, it should not be assumed that the Government intended that it was going to be a permanent policy. The MacMillan Committee had come very definitely to the conclusion that if there was to be management it ought not to be in the hands of»the Government, but irj the hands of a central banking institution. With that he freelv concurred.

The bill was read a second time without a division.