MONETARY POLICY

Evening Post, Volume CXXIII, Issue 135, 9 June 1937, Page 12

MONETARY POLICY

CHANCELLOR QUESTIONED

DEALINGS IN GOLD

(Brltlsn (ldlrlai rtlrelcss.l (Received June 9, 2 p.m.)

RUGBY, June 8.

The monetary policy of the British Government in relation to gold was the subject of a number of questions . in the House of Commons addressed to the Chancellor of the Exchequer (Sir John Simon). In repjy Sir John said: "The British monetary policy remains as it was laid down in my predecessor's statement to the World Economic Conference in 1933, in the declaration of the British Commonwealth of Nations to the same Conference, arid in the tripartite declarations in September last. No change in this policy is contemplated or has come before the Imperial Conference. "This policy .does not involve an obligation on us to buy gold at a fixed price, but it does involve the purchase or sale of gold for the purpose of . checking undue fluctuations in exchange rates. We have never hesi- ' tated, and will not hesitate, to buy or sell gold for this purpose. The close contact between " the respective Treasuries has been working to tha full satisfaction of the Governments concerned. No modification or extension of these arrangements is at present under consideration. I have been informed that the bulk of the recent offerings of gold in the London market has been due to dishoarding." MAINTENANCE OF VALUES. The Chancellor's reply gave rise to several supplementary questions. He was asked about the 'discount at which the purchase of gold was said to have : been made by the Exchange Equalisation Account and also whether, pending a final international solution of the problem, the Government would do everything in its power to maintain the sterling value of gold and commodity prices in the British. Empire. Sir John replied that, as to the maintenance of commodity prices, the answer, he thought, was clear from the statement he had just made. , As - regards a widening of the discount on the London market, that was a highly - technical question and he was advised that importance it did not merit had been attributed to it. He did not consider that the circumstances had indicated any want of co-operation between the Treasuries! Asked if the statement meant there was no mr tention of returning to the gold standard, the Chancellor said that there was no ground for supposing that Britain was contemplating a change.