OFF THE GOLD STANDARD

Stratford Evening Post, Volume I, Issue 258, 9 October 1931, Page 3

OFF THE GOLD STANDARD

THE OTHER SIDE OF THE PICTURE The following letter from Mr. A. Spencer Watts, who represented the Associated Chambers of Commerce of Australia at the conference at Washington, appeared in the Sydney Morning Herald last week: “There appears to be a feeling m many quarters akin to jubilation at the latest—and greatest—disaster which has befallen Great Britain, the depreciation of sterling and an expectation of great advantage to be derived by Australia therefrom. Let it. not be overlooked that any advantage which may accrue to Australia will be at the expense of Great Britain, and be short-lived. ,‘Off the gold standard is a phrase which may serve for lack of better. Gold is still the standard measure of value for international settlements in the last resort, and though London has ceased to be a free gold market England must still pay her external commitments in gold or value measured by the gold standard, or. alternately default. At the same time Great Britain is still the world s greatest creditor nation, and must accept payments of almost everything owing to her in sterling, and it sce.ling should remain around 25 per cent, discount it means in plain terms receiving 15s in the pound from her debtors and paying to her creditors 20s in the -pound. “Last year; notwithstanding extremely low prices, Great Britain’s purchases of foodstuffs to feed her population cost more than £1,000,000 a day, and even if no increase in the gold price occurs the additional cost _er day with sterling at 25 per cent, discount will be in the vicinity of £350,000 per day for seven days a weeK. England must still import huge quantities of foodstuffs or see her population starve, and whqt hopes has she in the present condition of world trade to increase her exports, no matter how cheaply she manufactures to achieve anything approaching a balance of trade? Any results in this direction that can he immediately hoped for will be on the side of less imports. , , , . “Let no one imagine that going olt gold’ was voluntary. Since the German crisis of July, London s leading financiers, to whom the politicians turned in despair, have strained every nerve in an endeavour to save sterling from depreciation, and the nation must now strain every nerve to get sterling back as near to par as possible with the least delay to avoiu consequences to Great Britain and the Empire too awful to contemplate. Unless Australia is prepared to stand alone in defence, as well as other matters, any advantage she may gain at the expense of Great Britain will prove Dead Sea fruit. One instance only should make clear the Ibss to Great Britain when we remember that in June of this year we shipped £5,000,000 of gold to meet London’s debt of £5,000,000 sterling, and that a debt of precisely the same amount which falls due to a London bank this month could he satisfied by the shipment of £4,000,000 gold, a loss to Great Britain as a national unit of 25 per cent. “It would appear that two or three years of Labour-Socialist Government has dealt a severer blow to Great Britain’s financial standing and prestige than did four years of devastating war.”