MONETARY POLICY

Otago Daily Times, Issue 23213, 10 June 1937, Page 11

MONETARY POLICY

THE RELATION TO GOLD CHANCELLOR QUESTIONED NO CHANGE CONTEMPLATED (British Official Wireless) (United Press Association) (By Electric Telegraph—Copyright) RUGBY, June 8. The monetary policy of the British Government in relation to gold was the subject of a number of House of Commons questions addressed to the Chancellor of the Exchequer. In reply, Sir John Simon said: " The British monetary policy remains as laid down in my predecessor's statement to the World Economic Conference in 1933, in the declaration of the British Commonwealth to the same conference, and in the tripartite declarations 'n September last. No change in this policy is contemplated or has come before the Imperial Conference. This policy does not involve obligation on us to buy gold at a fixed price, but it does involve the purchase or sale of gold for the purpose of checking undue fluctuations in exchange rates. We have never hesitated and will not hesitate to buy or sell gold for this purpose. Close contact between the respective Treasuries has been working to the full satisfaction of the Governments concerned, and no modification or extension of these arrangements is at present under consideration. I am informed that the bulk of the recent offerings of gold in the London market has been due to dishoarding." The Chancellor's reply gave rise to several supplementary questions. He was asked about the discount at which the purchase of gold was said to have been made by the Exchange Equalisation Account, and also whether, pending final international solution of the problem, the Government would do everything in its power to maintain the sterling value of gold and commodity prices in the British Empire. Sir John replied that as to the maintenance of commodity prices the answer, he thought, was clear from the statement he had just made. As regards the widening of discount on the London market, that was a highly technical question, and he was advised that importance it did not merit had been attributed to it. He did not consider that the circumstances had indicated any want of co-operation between the Treasuries.