THE GOLD STANDARD

Timaru Herald, Volume CXXXVII, Issue 19568, 15 August 1933, Page 8

THE GOLD STANDARD

BRITISH CHANCELLOR ON TRADE BARRIERS. Mr. Neville Chamberlain. Chancellor of the Exchequer, visited the Birmingham section of the British Industries Fair. Mr. Chamberlain spoke of the difficulties of the international situation and referred to the gold standard. “There are some,” he said, “who seem to think that it is the policy of the British Government to go back at some early date to the gold standard. It is rather difficult, apparently, to get an idea into some people's heads, because we have repeatedly stated, dnd I state it again now, that we cannot go back to the gold standard until we can be satisfied the gold standard will work, and in order that the gold standard may work there a great many things which will have to be done, and among them we shall have to see a substantial rise in the prices of wholesale commodities. “There are other matters which will have to be settled before we can go back, and as long as we have not settled these questions of interGovernmental obligations, so long there must remain throughout the world a kind of anxiety and uncertainty which will make it absolutely impossible for the gold standard to function satisfactorily. This is a matter of international conversations, and I do not doubt that it is a matter which will be taken up before very long and for which I hope we may be able to find some satisfactory solution.” There were greatly changed conditions in the world. Intematitonal trade was hampered to-day as it never had been before by all sorts of barriers, and nations were trying more or less to be self-supporting. “I have no objection to those barriers,” said Mr. Chamberlain, “provided they are reasonable, but excessive and oppressive barriers I complain of. There are prohibition of export quotas, but what is worse than that they have exchange controls, and people ask me how we are to expect to regain our export trade as long as we have to fight these exchange controls, the result of which is that our customers cannot pay for the goods when they want to buy them.

"That is all connected with the general disequilibrium in the affairs of the world, and it is one of the great problems of the future how we are to get again the international standards of value, some International currency measure which will take the place of the gold standard, which has ceased for the time being, at any rate, to be workable, how we are to get other countries once more to get the exchange working more freely. "These are rather complicated subjects. I think the key of the whole situation is to be found in the price level of the primary commodities. It is difficult to realise the terrific, catastrophic fall which has taken place in a comparatively short time in the price level of those primary commodities. We can see what the effect has been. The effect has been that many countries which are dependent for their solvency on the return they get from these primary commodities, find today that in consequence of this fall in price they are no longer able to meet their obligations.

“The moment that begins to be known confidence, of course, is withdrawn from them, and there follows also the withdrawal of money, and that has given rise to these exchange controls which are dsigned to keep up the value of their Internal currency. It is difficult for us in this country where we have not had that experience, to realise the nervousness in many ->ther countries about the possibilities of their exchange falling out of control. “How are we going to restore that confidence which alone will allow international trade to resume its former standard? To my mind it is absolutely impossible to propose that a single country can do that. It is possible for us to give a lead. Our sterling to-day is more stable than gold as a measure of value, and ive find from time to time additions taking place to the number of countries which are linking their currency to sterling, but we have got in order to approach to the possibility of the general adoption of that new international standard, to work with and agree with other countries, and for that reason the British Government is. and has been for some time, urging the calling together of a world conference to discuss this matter of currency and of prices and of standards and of all those other economic problems." It was no longer possible for any country to take up an attitude of disinterestedness in international affairs.