“PAY IN BAR GOLD”

Poverty Bay Herald, Volume LIX, Issue 17946, 25 November 1932, Page 9

“PAY IN BAR GOLD”

THE DEBT TO AMERICA SIR R. HORNE’S ADVICE WHOLE SITUATION CHANGED (Elec. Tel. Copyright—United l 3 ross Assn.) (Received Sept. 25, 3 p.m,) LONDON, Nov. 24. In the House of Commons, several questions were- put relating to the British debt to the United States, two suggesting the possibility of payment in gold. Mr. Chamberlain replied that he was not in a position to make a statement subject to the gold .inquiry. He said that all revelant matters would, be considered.

Sir Robert Horne, in the debate on the Addross-in-Rcply, referring to tlie debt payment to the United States due on December 15, said: “I have no doubt whatever that wo ought to pay. For Britain to default after her extraordinary recovery in tlie past. year, and tho prestige she resumed in the economic world, would be a disaster, not only for us, but for the whole credit structure of the globe. How should we pay? I have no doubt whatever that we should pay by shipping bar gold. ” Sir Robert Horne said there was at present £140,-000,000- worth of gold in the Bank of England. We had lived long enough off the gold standard to know that we need not be frightened at the absence of this gold. In ordinary circumstances this loss -of gold would lead to a reduction of monetary circulation. This must not be allowed, as a great deflation following the shipping of tho gold would be harmful to every interest. ‘‘ As Mr Cha-mbcrdaiu must shortly deal with the amount of the fiduciary issue, I hope steps will be taken to see that tlie monetary circulation is in no way lessened,” lie said. “The way to deal with this gold payment as a .budgetary matter is to .suspend the sinking fund to the extent of the payment; It would thus make- no difference to the Budget figures- or the sinking fund that was specially designed for the ,payment of tlie debt. Sjx ill oils'll ago objection might have been raised to such a suspension l on tlie ground that it would defer the conversion scheme. This difficulty is now -cleared away. The next difficulty will be the fall in the pound. “It, would cause me no anxiety if the pound fell further, as it has not vet fallen as far as tlie prices. If it, fell to three dollars, or even below it, would still be. a convenient medium of exchange. We should put the position that we were relying -less on imports and more on our own manufactures, while most of our purchases from the outside world could be made on a sterling basis. “The real trouble of the American demand was the check to steps towards a revival of prosperity, which all nations should have taken co-opera-tively. We are in a strong position as -the centre of a- great sterling area, representing half the world’s trade. We are the leading ship of the convoy, and I hope we will have courage enough to take action that -our leadership- demands -to help tlie world out of its present troubles.” France’s position in regard to war debts is complicated by the fact that M. Herriot cannot order the 'payment, to the United States in December without the approval of the Chamber of Deputies and the Senate, which are likely to be insistent that the debts must not be paid. On the other hand, the willingness of Britain to pay makes, M. Herriot reluctant to- allow Franco to default, Berlin reports khow that the German official opinion of the British view is that further explanations to the United. States- are needed, -but they consider that debt suspension docs- not affect Germany directly. BARRIER TO RECOVERY DEBTS MUST BE WIPED OUT (Received Nov. 25, 3 'p.m.) TORONTO, Nov. 24. “The United States insistence on payment can only retard for a longer period world recovery,” declares Sir Thomas White. “The debts must eventually remove themselves, as the burden is too heavy to be borne by international trade.”