FUTURE OF GOLD

Wanganui Chronicle, Volume 77, Issue 263, 6 November 1934, Page 9

FUTURE OF GOLD

EUROPEAN SITUATION. LONDON FINANCIAL VIEWSThe question of the effects on the price of gold if France abandoned the gold standard is again being discussed ?n London financial circles. The principal countries still linked with gold are France. Holland, Switzerland, Italy, Belgium and Germany. It is assumed that if France went off gold the smaller countries in the gold bloc would follow. In that case, the franc would no longer be the main anchor to which the sterling price o± gold is attached, and the sterling price would have to be determined by reference to the stcrling-dollar rate, provided the United States continued to buy gold at 35 dollars an ounce. It is contended the basic factor in the situation is that every official pronouncement made by international monetary authorities .since 1931 has reaffirmed the decision of the world ultimately to return to the gold standard, and it is reasonable to suppose that it the price of gold in terms of various national currencies showed any tendency to fluctuate wildly the Governments would regulate and stabilise the price by intervention in the open

market. . , L The Statist holds the view that the prospect of the whole world abondonmg gold is not one which should cause holders of gold shares undue qualms, for the general abandonment of the gold standard would be but the signal for a genuine effort toward international rehabilitation and restabihsation of all currencies. As Governments will have the chief responsibility of fixing the price of gold, it is stated that it i-- likely that the tendency will be toward a high price, as this will benefit. Government finance by its effect in reducing the amount of national debts.