The Guardian And Evening Star, with winch is in corporated the West Coast Times FRIDAY, SEPTEMBER 25, 1931. THE GOLD STANDARD.

Hokitika Guardian, 25 September 1931, Page 4

The Guardian And Evening Star, with winch is in corporated the West Coast Times FRIDAY, SEPTEMBER 25, 1931. THE GOLD STANDARD.

In the course of a recent address, Professor Tocker of the Economics Department of Canterbury College said it appears possible that the drastic step which has been taken by Great Britain in suspending the gold standard may prove the definite step required to initiate recovery from the present depression. For some years past, Britain had been striving to play the gold standard game according £'o the accepted rules of that game. London alone had been a really free market for gold and had had to bear most of the burden of extraordinary fluctuations in the demand for gold. Now London has given up for the time being the attempt to carry that burden, and it is possible she may be unwilling to resume it unless on a hasps much more satisfactory to her than has been the case in the recent past. The immediate effect of suspension of the gold standard would be that the rices of English goods would probably not undergo much change, but American goods and foreign goods' generally would become dearer. Throughout the whole of the war, New Zealand currency was maintained at par with British currency. It appears probable, therefore, that the same practice will be followed now, and consequently any advantage accruing to British trade as a. result of the lower value of the sterling may he reflected in New Zealand. For instance, if New Zealand currency is kept at the present level or at par with the sterling Britain will not have to pay any additional premium on imports from New Zealand, but any improvement in prices in Britain will be reflected in the prices received for. New Zealand exports. The present suspension of the gold standard appears to have been forced on Britain by abnormal conditions of depression in many other countries and by the concentration on London of extremely heavy demands for gold. The suspension of gold payments meafis that the exchange rat"" cam new fluctuate beyond the gold point and the immediate effect sWms to have been panic selling of claims on 1 sterling which have reduced quotations in ca'es to Inflow four dollars for the pound. Probably wide nnd irregular fluctuations of the sterling are to be expected for a day or two. after which it is .probable that the rate will achieve a fair measure of stability at a level somewhat lower than the gold level. It is possible, too, that having once suspended the standard Britain may be ready to acquiesce m a lower ex-

change value for the sterling. It should not be forgotten that every fall in the 'pound sterling on the exchanges places a corresponding bonus on the international value of British exports and a, premium on the prices paid far British imports, so that a fall in the exchanges should quickly bring about a recovery in the balance of British trade.