Poverty Bay Herald PUBLISHED EVERY EVENING GISBORNE, SATURDAY, OCT. 24, 1931. THE CURSE OF MIDAS

Poverty Bay Herald, Volume LV, Issue 17607, 24 October 1931, Page 4

Poverty Bay Herald PUBLISHED EVERY EVENING GISBORNE , SATURDAY, OCT. 24, 1931. THE CURSE OF MIDAS

Great interest attaches to the conversations now in progress between the President of the United States and Premier of France, the importance of which can scarcely be overestimated. Between them the two nutions of which these gentlemen are the respective administrative heads have most of the gold of the world, and frankly they are at a loss to know .wliat to do with it. Upon the plans that they may make for its better distribution will depend, in no small measure, tho future prosperity mot only of their own countries but of the rest of the world. Like the Unhappy King Midas of the legend they hayo obtained their wish and secured vast stores of the precious metal, ‘but are now beginning to realise that they would-be better oil’ without itl A young American journalist who was taken through the vaults of the Federal Reserve Bank wrote his impression thus; “It is an unexpectedly, sobering .tiling to look five hunrred million dollars in the face. >SHm, neat bricks at once the anchor and the hurricane of human dreams —warm and hypnotic to the eye—not a symbol of value, but value itself.” “There,” says another writer, “you have nox the symbol ol the American mind, but the mind itself. It is a mind which has been concentrating- Upon the accumulation of gold and has regarded the gold in its possession not as a symbol but as actual wealth, whereas, as a matter of fact if the possessor were cast upon a desert island with the whole lot, and twice as much more ho would bo more than willing to give the whole away for a lo&f of bread.” And so America, with her hoards of gold and her multitudes of unemployed, with markets closed against her by the impoverished nations is beginning, to wonder whether, after all, the gold is moro than a symbol and a very depreciated symbol at that. Franco is in much the same position, and Britain's master stroke in declining to maintain a fixed value for this metal has caused some hard thinking and has brought' together tnesc two heads of nations in an endeavor to determine .vvhat. is the best policy to pursue to effect a Wider distribution of the symbols nnd to arrive at a better basis Of national wealth, in which not only France and America but all the world will benefit. The world's great, need of reconstructive measures is the great impelling force which has brought the two statesmen together. Peace anil confidence and harmonious economic equilibrium for all closely inter-related countries is the goal which must be aimed at if any satisfactory solution of the present problem can be achieved, and whilst the prescut conferencemay lay down principles for the attainment it is clear that an international conference will be necessary to givo practical and permanent results. Mr. Snowden, the British Chancellor, emphasised this in a speech the other day when he said: “We would willingly call an international conference for this purpose. It has been made clear to us that such a move is unwelcome to some other parties. It may be that the present'crisis will bring home to them the necessity for some concerted action.” Mr. Snowden took the opportunity to refer to tho large number of bank failures that have occurred outside England during tho world depression. ‘ British banks arc safe,” he said, “whereas in some Countries bank failures are a common occurrence.'' A world conference foi the redistribution of gold, he added, would readjust the world's financial nnd economic machinery, and this view is supported by a high financial' authority ill England who expressed the opinion that the repercussions of Britain's suspension of the gold standard yvoiild necessitate discussion of tho entire post-war fiuane.ial network,

including war debts and reparations. President Hoover has a profound convictid.n that, excessive armaments are eating the financial hearts out. of the world’s major countries; With the utmost earnestness lie has set about the task of securing a reduction of armaments in Europe, holding that such a reduction would lessen taxation, strengthen confidence and promote the world's well-being. Americans have not disguised their belief that a strongly militaristic and finan daily powerful France has been a big factor in hindering the world's return to'industrial and financial equilibrium, whilst French people, on the other hand, have strongly resisted the American desire for reduction of armaments and have demanded formal undertakings for their protection as a precedent to taking such a step. Mr. Hoover and M. Laval are likely to closely examine this situation and war debts and reparations cannot fail to bo the main topic of their discussions. Some commentators have declared that the President .will employ war debts as a club to force an agreement flu.-armaments, but against this view it is held that financial conditions in Europe preclude the possibility of tho United States demanding resumption of payments at the end of the year's moratorium'and that France as a creditor nation in reparations: and the United States as a efidjtoi' Nation in war debts,- with their 'debtors in each ease unable to meet their demands, arc actually in the same boat. It is probable, therefore, that the discussions will resolve themselves into an endeavor to reach a common understanding upon the related questions of security for France, armament reduction, and relief for the impoverished nations by a better distribution of the world's gold supply.