THE GOLD STANDARD

Hokitika Guardian, 6 May 1925, Page 2

THE GOLD STANDARD

AUSTH.U.IA.V AND N.Z. CABLE ASSOCIA'UON BRITISH RILL PASSED. LONDON. Alay 1. Iu the lfon.se of Commons, .Mr Cuit.ncss moving the second reading of the Gold Standard Rill pointed out. in connection with the proposal that the Rank of Knglaml was hound to sell gold in amounts of not less than four hundred ounces troy weight, and line gold in liars, also that bach bar would he worth about seventeen hundred sterling, and tin- size of the bar alone would prevent this proposal !.<■- in;.; list'd to bring hack gold into general use. and it would also limit the possible drawing o| gold for export. The- clause of the Rill empowering the Treasury to borrow for exchange operations, he said, would not increase the total amount of money which might he borrowed. Any Minis raised under these powers must, conic out of the usual provision fui burrowing up to tile total supply for tip'

vices for the year voted yearly iu the Appropriation Act.

Two credits had already I emt conditionally negotiated under this head one was with the .Federal Reserve Rank of New York, who gave the Rank of England a revolving credit of two hundred million dollars lor two years from the lUlh. of May. The second tu- with a syndicate headed by Mr J. R. Morgan. This credit was to His Majesty's Government ditv t for a revolving credit for one hundred million dollars, also for two years. The interest in each case would la- payable, when tlm credit

was drawn upon, at one per cent, above the Federal Reserve Rank's discount rale, with a minimum of four per (lilt, and a maximum of six per cent., or, if the Federal Reserve rate exceeded six per cent, at the Federal discount rate.

"If we do not use the credits.’ Air Guioiio.-s ,-:i id. "mi interest will he payable.” Mr Guinness further explained: ‘‘There will merely be a very small commission on the right oj call on tho monev.”

He hoped that, in view of its urgonev. the House would pass the Rill without delay. lie did not fear any rise in the Rank rate of higher prices. The Government believed that the country hud reached the singe ot its purchasing power being at parity, and that, iu the long run, the producer would have more gain I rom tho security of the gold standard than hanking interest. l.AßOrirs FF’\YIS. LONDON. -May I. hi the House of •( - ill moils, the F.xC'haocellor of the Exchequer. Mr Phil11> Snowden, moved a Labour I'liiondmoiit, to the Gold Standard Rill, refusing the assent of the House to tho Rill, which, by providing for a return to the gold standard with undue precipitancy. might aggravate the existing grave ii.md.il inns of unemployment and trade dcpivxsion. Mr Snowden emphasised Hint he was not opposed to a return to the gold standard. hut he protested against the (bjvenimvnt'.s undue. prmi| ila ivy. The Labour Party. by this amendment. dissociated I! s ■ 111 selves tIX 111 the disastrous consequences which might follow the Rill. LONDON. May 5. In his >; .cm hin lepiv to the debate on the Cold Standard Rill, the C'ii-ti-rcllor of ill" Exchequer. Mr Vim-toil (' 1 111 ii 1 1 ill denied that t l: c do Finn to return to a gold 'iamlanl could he described a - one of plVoipilam y. Oil

Ii ui'st ex| iwt linnn ini advice in ill l ' World. The titi ve r 1111 ) * l ll l had talent every pri'e:i nl hut witch torn hnuglit paiionoe ; iiid long preparation 'oil

I jibe of giving long lint ice of lhe i turn in gold, and jointed out that il they laid wailed fir lhe Act to expire at th* 1 end of the year, everyone could miller the existing Jaw. have withdrawn and hoarded gold against the dale of it-, free export, irno'ly noxt Jaiiuarv whi-ii the normal demand for bullion would he high, lie insisted that no country in the world was las aide to afford to diverge from economic facts than Britain. As regards the allegation that this decision w-onii! shake them to America, tin* Chancellor of the Exchequer said that it would certainly shake them to reality. for good or ill. Ho. | ersinially. believed that it "as the only basis offering a permanent * ecurity. Referring to the neies.sity for Tmpcrinl unity regarding the gold basis. Mr Churchill said: ‘-Had we shown ourselves incapable nf taking any decision. the sell-guveruiug Dominions might have adopted gold, and they would have traded, together, having the Mother Country to pursue a different policy. They would have traded with the Foiled .Stales on a gold basis hut. with sterling left out. that would have been a disastrous state of affairs from our viewpoint.’’ If* l knew nothing which would jus-

tify an increase in the Rank rate in tin l immediate inline. Indeed, the situation was stable, ami everything tended to 5.1.0 w that transition to gold had hitherto been ell’m-led with eiie-

Alr Chiiri'.i!l declared that Britain was mat only the financial centre of the world, hut 'lie was the lentre of ■I wide Fml-iIV. "If we detached ourself I tom their movements. we

would run the great risk of becoming isolated and loi«.euing tin- bond, wherea-s the fortification theivnl lias been imlisneii'ible t<> our well being." lie si* uli'd tin- siigge-tinn that Britain might lie unable to hold her own against strong trans-A tlantie infltieii-

ecs. and he pointed <ul that Britain still coni rolled a va--| amount id tie* world'.- business. She bad mugndiaeiit credits, and also three mil r i sterling of I'nreign investments. Britain, said Mr Churchill, held one hundred and fifty three millions in gold, and the Dominions field oie- hundred and seven millions. The Kinptre supplied seventy per cent of cite world'- gold.

i Mr Churchill cited iiistame.s of | rci war discrepancies between British and American price levels, and of their normal. timely ro-,adjust meat. H" said that in order to disprove that in absolute e'piatiou of prices w a.- essential to the restoration ot the gold standard, lie .om haled that tin Dopiin.ions unfP-d were an eiiorim us jiower. They were great. intricate and comprehensive enough, to exist side by side in amicable a>.so( iatiou witli an even 1-rger ennonue and finaneia! power. without their own essential independence being pre jud butt Ily affected. The Bill was read the l-c ami time without division. I.uNDuX. May In hi.s .spec It in favour of the Labour amendment to the Gold Standard Bill. Mr Snowden .said he declined to accept Mr ChurehilKs statement of the existence of a practical parity, as between the prices in Britain and those in the I’nited Stales. Mr Snowden thought that the difference amounted to five tier <eiit. The British Government .should have waited a little longer in the hope that a parity in the gold level and in prices would Ire reachable by the normal one ration of trade,