RESTORED STERLING.

Thames Star, Volume LVII, Issue 16425, 24 February 1925, Page 6

RESTORED STERLING.

WHAT IT WILL MEAN. (By die CITY EDITOR ol me Daily Maii.) What will tlii 1 restoration 01 the U sterling to parity with the American dollar moan to Groat Britain;- ihe recent rise of the Z to the highest quotation since the exchange ceased to be “pegged" (that is. propped up ny Government operations) lias revived this question. It will.mean that a LI note, or a good British hill or cheque tor Ll. will bo worth a gohl sovereign ail the world over iur the first Lime since the war. It wiii not mean that Ul will buy as much in goods as before the war, because even when expressed in gold (as m the United States,) prices still siiow a big rise. Nevertheless, failing a rise of prices in tho United States, it wiii tend to lower the British prices of commodities that have an international market, such as wheat, cotton and oil, and wiii tend to reduce the huge sums we send across the Atlantic for our imports of these, because the jj will represent so much more gold in the international market. It will mean also that we shall pay less in sterling • for tho dollars that we have to buy to meet the instalments of principal and interest on the huge dollar debt we owe to the American Government though if there is a proportionate fall in the Britisn prices of the things we export, this relief will be neutralised, because we shall still have to provide the same quantity of goods as now. It will mean exchange stability in place of tiie present uncertainty that disturbs our export and import trade. After parity has been established for a certain period, perhaps . year, Parliament will probably ho called upon to decide how the supply ol Ul and 10s notes is to be regulated.

It Parliament decides that only a specified amount of L'l and l(Js notes shall be issued without cover (that is. without a corresponding amount ol gold reserve, either in the Treasury or at the Bank), then we shall have returned to the gold basis lor our money, hut whether the restoration of the L to parity with the dollar will mean the renewed circulation of gold coin in Britain is doubtful.