INTERNATIONAL FINANCE

Hokitika Guardian, 3 February 1921, Page 4

INTERNATIONAL FINANCE

A RANKER’S SUGGESTION

LONDON, Dec 10.

Mr F. C. Coodenoiigh, chairman of Barclay’s Rank, gave an address to the Liverpool and District Rankers’ Instistute in which lie made a suggestion lor improving European exchanges, the demoralisation of which is ail important cause of trade depressions.

Mr Goodcnoiigh pointed out the example of India. He said that as an essential preliminary to stabilising the rupee at its agreed parity, India, had to close her mints to the coinage of a currency which was already inflated, and in the same way those countries who are daily adding to Urn volume of their paper currency must close down their mints- i. 0., their “printing presses.” He agreed that, first of all, the gap between revenue and expenditure must he filled by some other means thun “sacks of paper,” but lie suggested that even when this reform has been effected it will he found that in most cases a gold standard will be impracticable. Instead, he said, it, might be desirable to adopt a gold exchange standard much upon the lines of that which served India so well. This gold exchange standard he defined as “one which docs not require the utilisation of gold for purposes of currency, hut rests on the provision, by the Government of Lie country, of foreign remittances in gold, or the equivalent of gold, at a fixed minimum rate. There is not necessarily any undertaking by the Government to convert its currency, whatever may bo the particular form ill use, into gold, but the Government guarantees to purchase or sell foreign exchange at rates equivalent to tho gold import and export parities. Count. Sforna, a member of the Italian Cabinet, who has been here on matters pertaining to tho relations between his country and Greece, has also put forward a scheme whereby tbe trade between European countries can be restored. Ho gives it as a purely personal idea. Here, again, the principle is based upon tho inte.vention of the respective Governments. “If the Governments would determine on some measure by which •they could finance their own manufacturers and agent firms,” he says, “the obstacles in the wav of ar. international trade, revival would ho swept away. For instance, let iis say that tho manufacturers of one country have qualities of machinery railway material, needed in another country which has stores of grain for export. The two respective Governments, when the business agents havo settled all the preliminaries to the deal, could, being in possession of all necessary documents, negotiate one wit.i the other. Tho.ii the one Government could pay cash down to the manufacturers, while the other would give the same necessary financial support to its grain exporters, or, l>ctter still, the two Governments in agreement could advance the money needed to t.ie business agents to carry through the deni. It requires a great deal of careful thought and consideration. But lam sure that the only cure for the present political unrest and general discontent is the restoration of international commerce on which every country in the world is vitally dependent.”