The Guardian And Evening Star, with which is incorporated the West Coast Times. WEDNESDAY, NOVEMBER 9, 1927 GOLD SUPPLY AND COMMERCE.

Hokitika Guardian, 9 November 1927, Page 2

The Guardian And Evening Star, with which is incorporated the West Coast Times. WEDNESDAY, NOVEMBER 9, 1927 GOLD SUPPLY AND COMMERCE.

I The future of the world’s gold supply I as a subject of discussion possesses more I than an academic interest. But discussion of the question, comments an I American journal, is a good deal like I talking of next year’s weather; it the I weather is to he bad, business will be ' bad. If the gold supply proves insuiliicient, the prosperity of every civilised country will be influenced adversely by I the fact. Columns of space might be I employed statistically on either side I of the controversy. The trouble is I that while these statistics may prove I one thing this year, or servo as the basis of prediction or prophecy for a I long range of years their value may I be offset by a single incident of discovery overnight. Just at present it . looks ns though the world’s gold supply is shrinking, or, to put the matter in . a different way, that the demand for gold is increasing faster than new supplies of the metal become available. If this gap is not closed, the assumption is that money and credit will advance in price and that commodity prices will fall. It may be remarked in passing that, oven witli the failure of gold volume to expand, money and credit are not advancing in price. The contrary is true. While the United States has quite as much interest in the problem—more, perhaps, than other countries—the position of America with reference to gold stock is almost impregnable. Half the available gold currency of Hie world is now in possession of tlie United States. The argument of a considerable school of economists that the entire world would be hotter off financially if the surplus supply of America was equitably distributed finds abundant support. But any distribution based on other than a corresponding development of trade interchange is extremely remote. Assuming for the moment that the shrinkage of gold supply is to he per manent, it does not follow inevitably that the world’s business progress | must cease. Gold is the real basis of I credit Issues but with the refinement of hanking practices, arbitrary percentages of gold reserves, based on present conceptions are perhaps subject to readjustment. That is the solution of the gold supply problem if it licoomes acute. Such a srage has not been reached, nor is the necessity of worry over it apparent. Discussion does no harm, however, if it is only indulged in to make familiar a possibility fraught with world-wide consequences. When the time comes, if ever, that the shrinkage in available gold supplies can lx; called acute,"There is good reason to believe that the hanking and financial genius of the period will have found a method of meeting flic difficulty.