The Guardian (And Evening Star, with which is incorporated the West Coast Times.) THURSDAY, FEBRUARY 21, 1921. THE GOLD STANDARD.

Hokitika Guardian, 21 February 1924, Page 2

The Guardian (And Evening Star, with which is incorporated the West Coast Times.) THURSDAY, FEBRUARY 21, 1921. THE GOLD STANDARD.

]{.vriii:i! more attention is being given now to the above question. It is frequently referred to in “A Tract on Monetary Reform” by Professor J. M. Keynes. A return to the gold standard was advocated by Lord Incheape at the recent meeting of the I’. and O. Steam Navigation Company, and an address lately delivered before the Institute of Bankers and the Society of Accountants at .Edinburgh by Sir Charles Addis, of tin Hong Kong and Shanghai Banking Corporation, was in the same strain. More than one passage in the brochure by Professor Keynes, remarks a London financial journal, really constitutes a strong argument in favour of the gold standard. It is admitted by most people that if we could achieve stability of prices the country would greatly benefit, and this stability Professor Keynes admits, was to a great extent secured, under the gold standard, throughout the nineteenth century and up to the war. The very high prices of the Napoleonic wars, he adds, were followed, by a rapid improvement in the value of money in the first quarter of the last century. I-'or too next seventy years, with some temporary fluctuations the j tendency of prices continued to be downwards. This statement scarcely | bears out an earlier remark that ‘'deflation which causes falling prices, means impoverishment to la hour and to enterprise by leading entrepreneurs to restrict production, in their emleeviiii to avoid loss to themselves, aijd is therefore disastrous to employment,” because the seventy years' ending in 189fi were by no means marked by unemployment on a “disastrous” scale. For a epriodof olese on a century from 1336 to the outbreak of war, the maximum fluctuation in prices in either direction was 30 points above or below ail index number of 100. We had a gold standard in that period, which, as pointed out by a writer in the last monthly circular of the Bank of Liverpool and Martins, Ltd., was a period [ distinguished l>v great discoveries, great ! developments and much disturbance by wars and political changes.. Professor Keynes, however, regards the gold standard as “a barbarous relic” which is already in practice, and should be in avowed intention, thrown away and replaced by a. scientific “managed” currency, under which the Treasury and the Bank of England, instead of looking forward to the stability of the dollar exchange, should adopt- the stability of sterling prices as their primary objective. He considers that with tho existing distribution of the world’s gold the reinstatement of the gold standard mrans inevitably that we surrender the regulation of our price level and the handling of the credit cycle to the Fed-

oral Reserve Board of the United States.