MONETARY POLICY

Waipa Post, Volume 49, Issue 3505, 14 August 1934, Page 3

MONETARY POLICY

STABILITY OF STERLING. FOUNDATION FOR TRADE. MR. RUNCIMAN ON OTTAWA AGREEMENTS. London, June 14. Mr. Walter Runciman, president of the Board of Trade, was the principle guest at the annual luncheon of the Federation of Chambers of Commerce of the British Empire, at which Sir Arthur Shirley Benn, M.P., presided. Sir James Parr, Sir Thomas Wilford, Mr. Sydney Jacobs Mr. H. Turner and Mr. 11. P. Chinchen were the New Zealanders who attended the luncheon and the subsequent annual meeting, where Sir Thomas Wilford was elected deputy-chairman of the council for the ensuing three years. Mr. Runciman first spoke of the monetary policy. “We are now,” he said, “the foundation, the prop, if you like, of a stelling system which is the most stable in the world. “One of the considerations we had in mind,” he continued, “when thinking about Empire trade during the Ottawa Conference was that the old gold standard which had served our purpose so handsomely was not how part and parcel of our economy. We are now on a sterling basis that has proved steadier than any of us could have anticipated, and far steadier than gold. Bearing that in mind, we took a survey of the world to see where that sterling basis was of the most moment to us, first and foremost, of course, within the British Empire. “Both Canada and South Africa, of course, have complications. Canada has the good fortune of being cheek by jowl with the United States, and she cannot ignore the movements of currency questions in the United States. South Africa is pouring out gold, I believe, at a speed which is profitable to shareholders and by no means unprofitable to the South African Government. India has her own views about currency, but, in the long run, they all depend upon their clearances and for their stability on the sterling level we have obtained in this country.” A Solid Foundation for Trade.

Dealing with the views that have been expressed with regard to Britain’s monetary system, Mr. Runciman said that he felt a little anxious about some of the proposals. “I am not going to say anything about inflation and deflation, but I say this, that what is essential for the trade of the Empire is not that we should find a new basis for trade, but that we should find a solid foundation on which all trade should be built. If we can secure that confidence through the Empire and the world, we have made great steps forward in the recovery of international trade.” Referring again to the Ottawa Conference, he said he had a resolution in his hand which said, with reference to trade agreements that had been entered into by the dominions, that by the lowering and removal of barriers the flow of trade between the countries of the Empire would be facilitated and that by the increase

in the purchasing power the trade of the world would be stimulated. With that doctrine in mind they had carried through in detail all the items of their Ottawa policy. There were some purveyors of public opinion who had got it into their heads that the result of the Ottawa agreements was disappointing. He did not hold that view. He felt confident that as time went on and as relations between the dominions and ourselves were drawn closer and were better understood, the tendency under the influence erf Ottawa would be to add to the volume of Imperial trade. Power of Sentiment. He believed that not only because of the economic influences of their

resolution, but because there was a great influence in all industry and commerce which they could not ignore —sentiment. The old saying that there Avas no sentiment in business was untrue, and every decent business man knew It. They had within the Empire many races of various degrees of colour; and how did it happen that men of various religions, upbringing, and political outlook were able to work together with so much harmony within the Empire? It was because sentiment was more than a political formula, and because they felt that in binding themselves together they could contribute to the prosperity of each other, and that they could enjoy doing it.