DOLLAR V. STERLING.

Hokitika Guardian, 1 August 1924, Page 4

DOLLAR V. STERLING.

Ainei ican bankers do not like the continued prestige of the £ sterling. Ihey consider that the American dollar por gold), and Pot the £. slton.. he the basis for newly mgamseil cur-

rencies, sue T as Germany Vs, says tile l ily i-..liter ot the “JJaily .Mail. ’ Dei*ore the war the leading currencies of the world weie actually based 1:1. cold, 'twenty German marks, for in-tame, whether in the form of 20 silver coins or a Heichsbank note, wore worth a 'dU-mark gold <oin containing llO.d’Jtjd grains o, line gold. Twenty Iranis were worth a gold “loitis” or C'.Mj.l” grains of line gold. Gold licit,g gold all the world over, there was thus a fixed relationship between the world's moneys. Hahuices owing from one country 1.1 another that v.eie not

.si-tt.c.l in the ton ipii exchange, mar- ... t wete actually shipped in i t coin or bitJlian, and the !l act aations in loieien exchange latex were liccliecl by tile cost of Height and ia ttraate -'ll gold .shipineiit.s. The war changed all that. Trade and limui' e lie. .i:ih- so disorganised that tl.ete was not et.otigh on Id t 1 settle tl" l.a.'atices one way t.r the other. We i ought so ninth more fond and munitions from the I'nited f'tate.s ami sold them si 1111 c h Its: of 0111 gc t'at we laid to limit the export 1f g .Id Ire.tn ibis country and to bar-

tow tinge .-urns in America in order to prevent out gold teserve being completely 1",,t ill I ay-incuts to c.tir Amefiertn 1 linlit as. G dil ili'a; j etirctl fi.mi eif.-ti'atian. Sterling (Hank Hites end Treasury notes I ceased to have a real gold basis and d 0,.. cciated in gold value. 'I lie I'nited States been tile the 1 vi id'- cic'titor. holding the lull; nf the gild, and be ante the only t nullity with a teal gold I a'is. Whereas the sterling bill payable in London had before the. war almost monopolised the foreign oxl hnngo market, even for tlm settlement of debts lietwo a. say. iwo South American c calotte.-. t!m dolkir now h, ante itn i 1111 ■riant fat toe. hecai'sc nl the dis .'"- etinisecl <on lit imt of llutupe. 'lni' w veld's Hade* ufigolitly needs to get tid o!' Iluc t'aiting ciierciu ms- to pm iimen■ ies to siiT.e .standard. A e: turn to | ec-v.nr slait-chucls is w ith many 1 unit 1 if- impossible. Germany, lor instance, has si lavishly created ;:t; c r marks that it can never honour th tu at their gold value. It has tic; hi a! to treat them as mere '‘serais if pajef." A new unit, called the' 1 cute ame.fk, has hexm tempo:afily <•.-- tabhsliccl for internal use. ami to link that up with external c tin eta ies a in .v ■'Gold Discount Hank" has been c-inhl'-.hfil, who-c‘ c.olcs are last'll not cm geld or dollars, hill- on sterling (I!,-ink of Ktigland notes or sterling draft--; payahla in lioiiilon) that is to say. Germany aim* at pinning holer l'c iicy licit lo gold, not lo dollars. Inn to sterling. The Americans do pi t ir.ke V.h.'s. I heir huge gull hoard has Icil me a while clc pkaot. and in their own in--I,rests. cptile legitituately, they would like to see Kitfoj'c' MTaaihling for this gold in order to replenish Iter gold leservos and to got hack to a good basis. Kuroge may p.elVr to adopt some' other eonr-e. If the essential attribute if j currency is that it 1 lioiihl have a st:'.’ !e c auimnlii.; v:i'f.f in eih'f word*, tint pices expressed in it should lo stable then sterling .senilis for the tilin' being it latter -tamle.r.l than cloll.-i-s. bfc-au-e during ca.. pa. 1 \• if two I'ticfs in this count rv have I; a-n far more stable t ban in the I 'idled Stati •. u hero t lie huge paid lioa d has l'.-r ilitalc.l iiillttl! -ii ami over product it. 11. lulli: wed hr the ii evitable relapse'. Som-.T it hit- r the hi;; hoard may I reili-t 1 ihutecl through a more ciictgeiit- linamiiig hv American liiitin--lic tv rf 1111 j civeriahcil Kttr.ine. I util limit, i.'tiai't cauiilrii's may li ml it exp 'client 1b 1 -e t I’cir ein rcir. x 011 -a • t.i ling stmt'aid rathe.- than int'ilrc th ai-t'lvos in the expense ol o’-tainin; a -!i e C'f t'le Amcii aii gahl. Dcxp'ite the immea-f xttain of tho war and in -'tie the daligerons piece;! of the ii'ihtt inni-t narty sterling st ill -.fi! cl- iti high rcpido. Tin-: r.s. go: i) 1 ioa li i). Ni'.W V!) 1 !K. May 10. 'file a; -a t.lolls a-'CTlinll nf Ihr righl r.i llf t.trl*'r:c n drill, rt o n-jdarr tif pniinl .terling a- tic doiiiinani moclit! 111 nl worhl i x.-hangr i- teadr 10-iia;. I \ the Ad vis cry ('.tilleil of tlte l-rdi-ial deserve Hoard, the Allieri.-an .t| 11 ivale 111 1:f tic ll.in'k ol England. I- a- s-.'ver.d day.- the Council, ai the ii'cine-t of the Ibiard. has been icm.sidel'iug the Hawes liepatt. Tho l;eyiic.'t - of it- t‘■roniiai'iidat ions 1.- -uiumocl up ill the loll.twiiig I hi'.lloitt'.ing pa--sago-: Ihe Dawes deport leads the world to the rr..---mails, li provides for a German note is-ning dank 011 a gahl basis. Inti leaves tile door open to place ic on a steriinp' basis, and it cannot he denied that there is no small proluhiiil v of the latter basis being cl,l,sen'. I

11l ill,' o|iilliril ill ill" (‘iMllll'il. till' v,iiii,.| (l-.'rijiMiiv «•:«ii plmrtl "ii u

Miij,i up <4*>I■.i-:■ ni• 1 1;inti■ ini'-i.-. I hi' soiumr ran Kurland iiinl <>llmt count rios iil.-n i'i•:t:i'ii l) i'ii u• 11'*'-11'icti"! •/. ihl .■•1:111 iliii-.1. '.'hih'. if (h'iniiiiiy wore jilncd on n v!i 1 1 inl.ttsis. kni'lnnd in i'<’turitiiiv; h ;■ n unrostrioU'il noli!

'.vihi!il have to |inll not only hor own wi'iolit Inil tlmt in' Cornmiy also. Ii i: 11 1 •v i ins. tin'll lon'. that if tho non (P'iiiiiUi Ini:!; i- iilinitil on :i slorliny i'.v. liiinoc I :isjs the uorlil hum r:*•tin;'.' il-'t'li l:. ri'i'.Kiin in .i basis of oxi'li:iiioi> io.'.t.'iliilil.v for n prnlnnpod |;itjml. flu- I nil i;t « Itil-il I .'i'ini't I: * fol'i*M'l'ii. v. Ii i! * - tlio mlot.lion ol ;i polil ili.il i-. n i!:ill:ir— basis would ni'i cloniti' n r.'tuni lo wnrlil-wiili’ siithiliiy. It is ti.i- n’i!mi"it')i;s .'itoruntivo which i' iiiv:>i\l'd i;i ti i ; "onui-.iiion of i!ii- m-w 'Ml!,*! II 1: 11! I-11 in y i>** 11 Ii .

'I In- ('.i:>i-i-i! i'.i'ii-uni's ns ‘m nii'iv in ii..' t iylp direct i ,n" tl:*.' nilinp; tlmt lit' IVdori'l lies "IV" i’'tti|;s mnv consider n . f!iiri!iU> lor ihi'ir oni'ii inni lift jllll'i'll:' ■ s I . I'lnill (ii-' tllill'. < 'i'll;i !* t'lllll' hills I'liynh!" in tin- I'.S.A. il eiuhir-oil liv tho I'f.'i'iit- -liihlislii'd I'''.'l'iniin Cold Mo-disi- nmt flank, tho Mi-railed t-Yharhl I'mik. .'nil l.y pprnivd American ond ii -oi's.

This Council thaws this In••-reach in i rncliisinii:

Mea-nre- till' r 1 ■ l r do not oisIv f.‘in! i> ' ri:*u; <n:r ;ndd :inl im > notice id li-it 111 tv I!-.', lint. li.v ciiahli,iivr ami (•!’.: iiiirit”in<£ ml; r countries to trade i:i terms ill' dollars. v.o stimulate (m!i* cv.!i ly.-iiiii i omnu'n <\ \\'»* facilitate. furthormr-re. direct -nlt* in dollars cl' jiili illi Is. fI! - of HUlkjiijr foreign count rios and ourselves dependent in this rc-noi 1 upon Croat Hriliiin’- acting as linker and hanker, as naturally -he v. mill! \\ I ci'i' ilic pound sterling would govern a- an exclusive hnsj- of oiiinuTii' and trade. I According to the annual report of: I the I'Vderal deserve Board at the end Inf Alan li. tlic mniicturv st vks of "old I in the I'nite I States ainnttnted to I The C ’.if.oil oh erviv that in the eir-j I ( mn-ta; •r- there d: <>< m nny room for dntll t r .maiding the policy wliit-Ii the i'V'.h ftt! Reserve system should jiUi'tu'. The alternative to the displacement of tli>> nuond sterling hv the dollar in line work in relinhilitniing the economic pfi'ci-sscs of the world, the Council depicts in (■.:lmir' wlii'li will vividly appeal i i American financier-'. It says; Calcs- America the.!- ways ami means to p •rniit her ice hanking Ht'Cngtll I:? h.MlCiit Other l O’.lllU iCS. !•"rticithti-lv those striving in bring their hou-o in order, the dollar cannot maintain it- position as a world standard of exchange, and foreign 1 countries—and even American hanking and commerce—will once more in a larger ,

decree become dependent noon and tributary to tli;> pound sterling. to the greater exclusion of the dollar. • The danger of the over-saturation of America’s credit power is. the Council points out, being brought ever nearer bv the stream of gold flooding her shores,