GOLD STANDARD

Hokitika Guardian, 21 September 1931, Page 6

GOLD STANDARD

INTERNATIONAL MONEY MARKET. (British Official Wireless.) (Received this day at 10.15 a.m.) RUGBY, September 20. At a special meeting of the British Cabinet held to examine the situation caused by the demoralisation of international money market during the last few days, a momentous decision was reached that it becomes necessary to suspend foil - the time being the operation of sub-section two of section one of the Gold Standard Act, which requires the Bank of England to sell gold, at a fixed price. A Bill for this purpose will be introduced in Parliament to-morrow and the House will be asked to pass it through all stages in one day. There will he no interruption of ordinary banking business, and according to a Government statement there is no reason why sterling transactions should be affected in one way. The hank mt© will he six per cent. LONDON, September 20: 1 “The ‘brink fiite' is six per cent. Britain is off the gold standard” were the momentous tidings briefly ticked on the tape machines early jn the evening as an explanation of all day consultations at Downing Street, followed by a two hours’ Cabinet meeting at which the decision was unanimous. Never before in British history has the bulwark of the nation’s finances , been bu ttressed. On Sunday emphasis was laid oil the fact it is not a sign of distress by the National Government but on the contrary it is a sign of strength and determination to prevent unscrupulous exploitation of troublous conditions. When Mr MacDonald went to Cheques on Friday afternoon everything suggested normal on the exchange during the day by before seven, in the evening be was informed that the day’s loss were over seventeen millions sterling and immediately consulted representatives of the Bank of England and tho Treasury was told that the Bank reached the decision that it could not save sterling on its gold basis, but desired an opportunity to test the market on Saturday which was onlyhalf- a day. Mr MacDonald returned to Downing St. where he stayed the night. Fie summoned his colleagues on Saturday and .consulted financial and other authorities and later informed a marked loss of ten millions. It. was then that Cabinet decided action was imperative.

GOLD STOCKS. (Received this day at I n p.m.) LONDON. September 20. In view of the disquieting unpublished rumours in political circles last week not being unconnected with Mr MacDonald’s phrase “tight belts,” it is significant that mention should be made to-night of the present gold stocks. Britain is fortunately about normal but the Government intends most closely to watch prices. It is authoritatively stated" there* will not be a. steep slide in the value fund. There is no need for sharp appreciation of prices.

The “Daily Herald” declares the departure from the gold standard, which the present Government was to prevent, ends for the time being t!}q ( possibility of an early election. Mr Henderson says the situation calls for steadiness not panic. The fundamental strength of the nation is not, impaired. If we only remain calm and resolute we shall move speedily and successfully surmount the difficulties.