THE Thames Star. THURSDAY, AUGUST 23, 1923. THE GOLD STANDARD.

Thames Star, Volume LVII, 23 August 1923, Page 4

THE Thames Star.

THURSDAY, AUGUST 23, 1923. THE GOLD STANDARD.

"With malice towards nor tf' with charity for all; with firmness in the right, as God gives us to see the rig Lincoln.

Professor Gustav Cassel, of Stockholm, lecturing at the London School of Economics, said that the complete chaos in the world’s monetary system had so discredited the paper currency in the eyes of the o'eneral public that the desire foi The restoration of the gold standard had become very powerful. “It is of the greatest importance,” he said, “for the development of British trade and for the maintenance of London’s position as a monetary centre that the British gold standard should be restored at the earliest possible date.” If England wished to restore the old gold party to the pound sterling she would have to 'increase its purchasing value. In countries where the currency had greatly depreciated he suggested, there might • be devaluation and the creation of a new gold standard. He reached the conclusion that the present situation requires a raising of the Bank rates in Switzerland and in England and probably also in Holland, remarking that it did not seem reasonable to believe, that a rise in the value of European currencies in comparison with that of the dollar could be attained so long as the discount rates in Europe were, kept proportionately lower 'than those of the United States. In England some hesitation had been shown just at the moment when the country had been approaching the possibility of restoring the gold standard. Some people wished to wait for the accumulation of a very big gold reserve, and some people were* frightened by the huge burden which the American debt would involve for the British balance of payments. Neither of these fears seemed to him to be well founded. In his opinion the Bank of England had quite enough gold for all demands which could be put upon it if the British currency were kept in full parity with the dollar and if the rates of interest were forced up sufficiently to protect the British capital market against overwhelming demands for withdrawal. This last condition also meet the fear of a deficit in the balance payments.

While arguing that Britain should take the lead, Professor .Cassell said it was also a matter of great international interest. There was a very widespread belief that other countries should not take this step until England had first gone back to take an effective gold standard and London had again become a free market for gold. The latest monetary policy of the United States had tended to' give the value of gold a Considerable greater stability than it had had during a series of years. That was all the more reason why Great Britain should now step in, • a b-- its collaboration with the United States create that centre of

1 stability which was so badly needed for sound development of the world’s monetary affairs. What was wanted in the domain of money was nothing less than what was wanted in the economic and political domain, namely, a centre of stability which could only be created by a free and national co-operation between the two great English-speaking nations, a co-operation to which so manv smaller countries of the world would heartily give their support.