REMONETISATION OF SILVER.

Waikato Times, Volume 113, Issue 18985, 30 June 1933, Page 4

REMONETISATION OF SILVER.

When the United States decided to accept part-payment of war debt instalments in silver, it had been intended that the action would lead somewhere in the direction of the remonetisation of silver. Such payments as have been made to the United States are in silver, but it appears that the world is as far from a bi-metallic standard as ever.

In the case of Britain, all that has occurred is that a quantity of silver has been transferred from the stocks held by the Indian Government to the United States Government. Since Britain has been endeavouring to dispose of the Indian silver surplus for years, the transaction fitted admirably with British designs. The transaction no more helps silver towards remonetisation, however, than the sale of last season’s wool clip would link wool with gold as a basis for currency.

There are many obstacles to the remonetisation of silver. For the present, the insuperable obstacle is that gold has yet to be re-established as the basis of the currencies of most countries. If the World Economic Conference can achieve a satisfactory agreement for the stabilisation of currencies and a return to the gold standard, with proper safeguards against the forces that rend the gold standard untenable, it will have done much towards a restoration of prices and prosperity.

The tiouble, however, is that tho policies of many countries render the operation of the gold standard impossible. In the absence of freedom of exchange of goods, gold has become a medium of exchange, and the principles which formerly dictated the shipment of gold have become subordinate to other disturbing factors, such as huge debt commitments and the inability to ship goods freely. When the restoration of the gold standard has been effected, the question of establishing a fixed ratio of silver to gold may be considered. Meanwhile, there is little hope for silver.