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Hokitika Guardian, 5 November 1930, Page 4

In discussing the problems of the Dominions, the London Chamber of Commerce Journal gore on to remark that recent events have emphasised the need for some agreement between the various oversea Dominions for the purpose of facilitating financial transactions and trade intercourse. There is, for example, the question of gold supplies. Since the war much of the world’s stock Ims become concentrated in the vaults of the New York Federal Reserve and the Bank of France, a circumstance that has increased the difficulty of maintaining an adequate reserve of gold in Grent Britain against the credit required for trading and agricultural purposes. 'lt is likely that if a central bank were formed in each of the Dominions and the various institutions operated with a view to close business relationship with each other and with the Bank of England, fewer difficulties in connection with exchange and kindred matters would be experienced. T> case of Australia provides a striking example of the adverse effect- upon economic conditions which may bo produced by the difficulty of interchanging 'commodities and services. A ' mittedly, Australia acted unwisely in the past by borrowing too freely, thus | establishing a standard of living which, as pointed out recently, could not be justified when economic conditions deteriorated. (Apart firom itho diminuation in the prosperity of the Commonwealth caused by the fall in the price of wheat and wool, Australia was faced with a position in which it was extremely difficult to obtain the amount of exchange needed to finance obligations falling due in Great Britain, In a lesser degree the same difficulty was experienced by the Australian and New Zealand banks. The value of the currency dropp’d to a figure which could scarcely be regarded as a true index of the credit of those countries. 1 is probable that had a system of central hanking been in operation the difficulty -of effecting remittances from one country to another would have been greatly reduced. In Canada the exchange was very adverse t that country during ft part of the year, the result of a smaller harvest, but Canada has suffered much less than Australia and New Zealand. A development of central banking on the lines roughly indicated above might effect considerable economy in the use of gold, especially if the scheme were extended to the Reserve Bank of South Africa. No difficulty is likely on the ground of inadequate resources of the numerous banks operating in the oversea Dominions. A good many years ago the manner in which s ome of the Australian banks conducted their business led to difficulties. but such institutions have learned much from experience, and, taken' as a whole, the banks of Australia, New Zealand, Canada, and 'South Africa are thoroughly sound, while their operations are conducted with due regard to sound canons of finance 1 . ,Tn Itlie -aggregate the resources they command are enormous, 'but having regard to the urgency of the development of trade within the Empire, it is a little doubtful if these resources are used to the fullest possible extent.