BRITAIN’S MONETARY POLICY

Otago Daily Times, Issue 22326, 28 July 1934, Page 14

BRITAIN’S MONETARY POLICY

STABILITY OF STERLING FOUNDATION FOR TRADE MR RUNCIMAN ON OTTAWA AGREEMENTS. (From Our Own Correspondent.’ LONDON, June 14. Mr Walter Runciman, president of the Board of Trade, was the principal guest at the annual luncheon of the Federation of Chambers of Commerce of the British Empire, at which Sir Arthur Shirley Benn, M.P., presided. Sir James Parr, Sir Thomas Wilford, Mr Sydney Jacobs, Mr H. Turner, and Mr H. P. Chinchen were the-New Zealanders who attended the luncheon and the subsequent annual meeting, where Sir Thomas Wilford was elected - deputy chairman of the council for the ensuing three years. Mr Runciman first spoke of the monetary policy. “We are now,” he said, “ the foundation, the prop, if you like, of a sterling system which is the most stable in the world. . • , . “One of the considerations we bad m mind,” he continued, “when thinking about Empire trade during the Ottawa Conference was that the old gold standard which had served our purpose so handsomely was not now part and parcel of spur economy. We are now on a sterling basis that has proved steadier than any of us could have anticipated, and tar steadier than gold. Bearing that in mind, we took a survey of the world to see where that sterling basis was of the most moment to us, first and foremost, of course, within the British Empire. “ Both Canada and South Africa, ot course, have complications. Canada lias the good fortune of being cheek by jowl with the United States, and she cannot ignore the movements of currency questions in the United States. South Africa •is pouring out gold, I believe, at a speed which is profitable to shareholders and by no means unprofitable to the oouin African Government. India has her own views about currency, but, in the long run, they all depend upon their clearances and for their stability on the sterling level we have obtained in this country. A SOLID FOUNDATION FOR TRADE. Dealing with the views that have been expressed with regard to Britain s monetary system, Mr Runciman said that he felt a little anxious about some of the inflation and deflation, but I say this, that what is essential for the trade ot the Empire is not that we should hud a new basis for trade, but that we find a solid foundation on which all trade should be built. If we can secure that confidence through the Empire and the world, we have made great steps foi ward in the recovery of international trade. Referring again to the Ottawa - Conference, he said he had a resolution in his hand which said, with reference to trade agreements that had been enteied into bv the dominions, that by the lowering and removal of barriers the flow of trade between the countries of the Umpire would bo facilitated and that by the increase in the purchasing power the trade of the world would be stimulated. With that doctrine in mind they had carried through in detail all the items of their Ottawa policy.. There were some mirvevors of public opinion who had go ft Rito their heads that the result of the Ottawa agreements was disappointing. He did not hold that view. He felt confident that as time went on and as relations between the dominions and ourselves were drawn closer and were better understood, the tendency under the influence of Ottawa would be to add to tbc volume of Imperial trade. POWER OF SENTIMENT.

He believed that not only because of the economic influences of their resolution, but because there was a great influence in all industry and commerce which they could not ignore—sentiment. The old saying that there was no sentiment in business was untrue, and every decent business man knew it. they had within the Empire many races of various degrees of colour; and how did it happen that men of various religions, upbringing, and political outlook were able to work w>gether with so much harmony within the Empire? It was because sentiment was more than u political formula, and because they felt that in binding themselves together they could contribute to the prosperity of each other, and that they could enjoy doing it.