GOLD STANDARD

Hokitika Guardian, 27 January 1931, Page 8

GOLD STANDARD

LEAGUES OF NATIONS

REPORT.

(United Press Association- By Electro Telegraph.—Copyrignt.)

GENEVA, Jan. 24

The League of Nations’ gold delegate’s second interim report deals with the working of the gold standard. The rapporteur draws attention to the fact that the report has dealt directly with the problem of whether there is a direct relationship betwwcen the present economic depression and the gold position, as the terms of reierepce were drawn up before the depression, but the report indicates principles on which the efficient working of the gold standard depends. The report proposes a number of measures as necessary to achieve a beneficial distribution of gold, including the following:— First: The granting to the monetary authorities the powers to pursue any necessary credit policy to meet circiynstances. Secondly: Any international agreement regarding the reduction of the existing minima of gold reserves in the Central Banks. Thirdly: The maintenance of,' the present general practice of not circulating gold coin. Fourthly: Close collaboration between central banks. Fifthly: The improvement of the mechanism for the issuing of foreign loans, and the promoting' of international transactions in existing securities. The report expresses the opinion that a restoration of confidence could accelerate the perhaps slow processes by which the political and economic causes affecting the distribution of gold after the war should work themselves out. The report points out that the gold standard countries automatically assume the responsibility for conducting economic and financial policy foi maintaining confidence, and lor facilitating the general working of the gold standard, but the automatic application of the mechanism is inadequate, owing to the post-war conditions increasing the occasions when conscious direction is necessary. These principles should lead to a more ecUß'omic distribution of gold in the future assuming that political and economic conditions do ■ not create disturbances that no monetary policy could hope to counteract.