MONETARY POLICY

Wairarapa Daily Times, 11 May 1932, Page 5

MONETARY POLICY

BRITAIN’S OBJECTIVE PRICES OF COMMODITIES. Press Association Electric Telegraph—Copyright LONDON, Tuesday. The Chancellor of the Exchequer, 'Mr Neville Chamberlain, said in the House of Commons to-day that the Government could not expect by manipulation of sterling to be certain of guiding the prices of commodities as it wished. He had already stated the objective of Britain’s monetary xmlicy. The Government desired to see a rise in wholesale prices in order that industries might once again make profits. Several factors would affect wholesale prices. The first was the tariff itself, which must be subject tp what .happened to gold elsewhere. The second was the exchange value of the pound, which the Government did not desire to. see rise above the present level. The third was cheap money. He doubted whether a lower bank level than at present would result in reducing the rates for bills and overdrafts. In the absence of serious disturbances in other countries he saw no reason why there should not be a continuation of the present cheap and plentiful supply of money. For these reasons he did not take a pessimistic view of the future. He believed that with the aid of the tariff there would be a return of confidence and prosperity. The Government had been criticised for not moving fast enough, but no Government in modern times had brought about such a rapid change as the present. Let the House wait till the conferences were over, and Ministers had an opportunity for. hard thinking on the subject of drastic economies. Then they would not be disappointed. ■