INTERNATIONALISM IN TRADE.

Otago Daily Times, Issue 18465, 28 January 1922, Page 9

INTERNATIONALISM IN TRADE.

Modeen industry is international in character. As a consequence, the busi’Ho3s of every country is prejudicially affected by financial dislocations in any part of the world. “The year now drawing to a dose,” says the statist in a comprehensive international banking lection published, last month, “marks on© of the most eventful periods ever experienced in the history of inter* national banking. The events for which it was and will remain conspicuous were, it is true, but an expression of the untoward symptoms that manifested themselves first in Japan early in 1920 and spread thence to the United, States and so throughout th© world. The trade deadlock, with all its financial consequences, has become universal.” In this cold statement of fact the Statist introduces its readers to an exhaustive review of the finandal position and of the conduct of the chief banking institutions of the world. The public is, familiar with the demoralised state of foreign exchanges and with the effects on trade of depreciated currendes. A solution which the Statist has offered of the problem that is thus presented possesses, therefore, more than ordinary interest. It is designed for tho more embarrassed countries but, if it proved efficacious, it yrould assuredly assist every country. For the purpose of restoring stability the Statist has advocated "tho reanchoring with gold of the existing inflated currencies at their reduced gold values.” The Bulletin of the Federal Reserve Board of the United States for November is claimed by th© Statist as a supporter of its plan, and Professor Cassol’s recently-published work on “The World’s Currency Problems” is qnoted In further support. Professor Cassel says: “England and some Continental countries will certainly do their utmost to restore the pre-war parity of their currency with the dollar. Other countries with much more depreciated money will have to relinquish this aim and to choose a new parity with ithe dollar, concentrating all their energies upon keeping their money in that parity for the future.” When it is remembered that the note circulation of the Reichshnnk alone now exceeds 100,000 million marks the impossibility of the reestablishment by Germany of a prewar parity is quite apparent. Professor Cassel further affirms that “the first practical aim for the monetary policy of every country must be to give a stable interna! value to its own monetary standard,” and that “this is all the more obvious because such a stabilisation is, in any event, a necessary prerequisite for the restoration of a stable gold standard.” Though th© perfect method of currency stabilisation has not yet been discovered, the application of the world’s best brains to a solution of the problem must hasten the restoration of stability in international trade.