SIR NORMAN ANGELL’S PROPOSAL

Wanganui Chronicle, Volume 76, Issue 299, 19 December 1933, Page 6

SIR NORMAN ANGELL’S PROPOSAL

—♦- NORMAN ANGELL’S proposal is that the dollar and the pound should be tied to gold on a new ratio. The suggestion has an attractiveness about it at first sight, but actually it does not matter very much at what ratio the dollar and the pound are tied to gold if the flow of payments between London and New York are equal to each other. If the dollar is written down to four instead of the present 4.866 to the gold pound, then to preserve that new ratio trade will have to be regulated fo that end. But is not this putting the cart before the horse? It is not the preservation of an exchange equilibrium which is to be desired, but the free flow of goods between the two countries. When interference with the flow of goods takes place, then this interference is reflected in the variation in the rate of exchange. Should the United Kingdom, on balance, be indebted to the I nited States of America, and in view of the war debts that much may be assumed, then any cheapening of dollars as against sterling would be Io the advantage of the English debtor, but to the disadvantage of the English exporter to the United States of America. It does not matter which way the dollar is scaled, whether up or down, it is going to create further confusion and hurt some section of each community.