The Guardian And Evening Star, with which is incorporated the West Coast Times. MONDAY, APRIL 27th, 1925. TRADE AND PRICES.

Hokitika Guardian, 27 April 1925, Page 2

The Guardian And Evening Star, with which is incorporated the West Coast Times. MONDAY, APRIL 27th, 1925. TRADE AND PRICES.

Professor Co.ndi.iffe of Christchurch writes informatively on all economic subjects. In a late issue of the Lyttelton “Times’’, touching the future trend of prices, apart from cataclysmic movements Professor Condliffe doo s no: deny, if he does not affirm, the possibility of a gradual decline in values. It requires no very exhaustive survey of the. outlook to enable one to prophesy that the amount of currency needed to carry the trade of the world is likely to increase substantially as the yeaiß go by. For reasons connected witli the war there has been a large and world-wide upward movement of

prices since 10! I, necessitating the putting of a miic.li larger amount of currency into circulation than would have been the case had there been no war. Gold production, on the other hand, is decreasing annually, and on some important fields, notably on the .Rand, the end of profitable production already is in eight. The relationship between the gold supply, the demand for cur-rency—-or volume of trade— and prices, used to be regarded as one of the absolute certainties of monetary science. The lull, lion of gold, in a souse, was to provide the bankers with a ‘'something not ourselves, making for rightoou •lies'.;'' a pm amount ir.ilnonce delining their responsibilities and guaranteeing to these of us "bo arc not hunker; a demon.strablv square deal. So long as the bank redeemed it- promise ta pay sterling it stood without fear and without reproach. It is notable. that it is only on the occasions, coiiii aralively rare as they arc n British banking history, that the banks have bad to suspend gold payments, that they provide material for such attacks upon the gold standard as arc .sometimes made in our correspondence columns b.v gentlemen who make Lot litlic distinction between bankers and burglars. Hut nowadays we arc being asked to reconcile oil!'selves to a very conditional and guarded interpretation of the meaning of a bank note. “We promise to pav the bearer one pound sterling” is to mean something other than what the words convey. We are quite aware, says the “Times”, that there is a very good theoretical case lor ‘‘management’’ of even a gold-based currency, but we arc dubious concerning the psychological eflects of such management upon the business community. Our dubiety is shared by at least one Australian journal tlie Melbourne “Argus,” which strenuously in firsts that if Australia is to return to gold it must do so unreservedly. The gold standard lias some very intelligent and influential enemies at present, and the numbers of that army are not likely to be decreased by the virtual admission by the bankers of ai country that their gold reserves are so depleted, or run such risk of depletion that they are tumble to resume domestic gold payments. The adoption of any other conceivable basis ol currency probably would raise up a peck of new 1 and still more difficult problems for the bankers and economists to tackle, and the post-w ar world has more problems than it can solve already. It is to lie hoped, therefore, that the dominions at all events will be spared experiments that may shake confidence in their banking institution, the reputation of which, at present, speaking generally, is deservedly high.