MONETARY STABILITY

New Zealand Herald, Volume LXXI, Issue 21879, 15 August 1934, Page 7

MONETARY STABILITY

INTERNATIONAL ATTITUDE PRICE LEVEL INFLUENCE Some of the criticisms raised against the; declaration in favour of monetary stabilisation made bv the International Chamber of Commerce in April last were dealt with by Progessor Gregory at a recent meeting of the International Chamber in Paris. Business delegates from most- of the 30 international committees were present. Firstly, Professor Gregory took the British point of view that uritil tho level of prices inside tho United States and Japan had risen any discussion of tho problem of international stabilisation was premature. Professor Gregory expressed his own personal opinion that tho attitudo adopted by these two countries was now of less importance than it was at the time when tho resolution of tho chamber was drafted. There was no evidence, ho said, that responsible opinion in America was willing to face the risks associated with a further depreciation in the external value "of tho dollar, and there was no sign that the Japanese Government was willing to add a further cause of disagreement with Great Britain to its already complicated list of problems. Replying to tho criticism that prices must first advance-beforo tho countries at present off gold could safely venture to return, Professor Gregory expressed the opinion that the technical problem was how to get prices up so long as countries off tho gold standard refused to-risk anything. Owing to tho existing severe undervaluation of % the majority of the paper currencies of tho world, free currencies presented a deflationary influence of tho most severe kind.

Tho way to raise prices, he said, was to stabilise the external value of currencies and to revalue gold stocks. He believed that if such revaluation, wet-o undertaken the world would bo faced not by the danger of prices falling still more, but by the risk v that the central banks would find it technically very difficult to control the rise of prices which would ensue under the combined influence -of the much improved reserve position and a return of confidence.

In answer to those who urged a delay in the return to gold on tho ground that economic adjustment was not yet complete, Professor Gregory declared that if the world were to wait until all prices had been brought into adjustment with all costs that would probably bo equivalent to a permanent abandonment of the gold standard. It was quite impossible, he argued, to expect international action to take place on the assumption that no maladjustments i-emained anywhere to bo dealt with for the simple reason that so long as stabilisation 'was delayed, a new series of maladjustments required to be faced with every development of the situation.

QUOTATIONS FOR WHEAT LONDON AND LIVERPOOL LONDON. August, 13 Wheat. —Cargoes are quieter. Manitobas aro offered at 2s lower and Australians and River Plates are 3d to 9d down. Parcels arc attracting little attention. Manitobas are Is Gd to 2s down and Australian and Eiver Plates are .'id to 9d lower. Futures:—London: September, 24s 9d a quarter; December, 26s 2d. Liverpool: October, os }0 3-8 d a cental; December, 6s ljd; March, 6s 3Jd; May, 6s 5 3-Bd.