WELLINGTON NEWS

Hokitika Guardian, 28 September 1931, Page 3

WELLINGTON NEWS

BRITISH COURSE. (Special Correspondent). WELLINGTON, September 25. It has been frequently said that in every campaign Britain wins the last battle, gnd . thus.the victor. ..Britain Inis been assailed by an economic attack from without, and. has met the onslaught with characteristic British courage and. grit. . Soon after tile Groat. \Vtir dommejiced Britain, like all other European countries, si id off the gold ..standard. The Bank of England note which was convertible into gold on demand ceased to enjoy that privi.ege. ' Un April 2'l, 1925 Briiam reverted to tile gOid stqUuUicl, 1 emit *s. to saj there was no restriction on Hie ex-

port, ol goal, and tlie Bolin oi Biiglunu was oounu to sen gom tunuxu go.u at £H JUS il>jd par ounce, ana Ouy at l/s hd, tine gold winch is oyo-iUuoui pure go.d or course curried a in-ner pnee. But the bang was promuited' from selling ,ess man

4UU ounces at any time. nami notes that is single bank notes were not eligible ror conversion-:into go.u as was

tile case before'the war. iuat seat-, ion or toe Act ol ittio is now repeamu and the Bank is. not obliged to se.i gold. There has been a run oh iuiju.,, in London, . loieign bailies, foreign business nouses and foreign, countries hold, funds in London, some for ten. porary investment■ in bids, acceptance., and government securities, ail p, which,- and- particularly tue latter, are \ < ry iU{in"

mieSO • foreign appear to have lost chiifidence "iff ' Y ‘the pound sterling and . sonief of the iore,gn interests were themselves in di.muit.es through Germany's financial troubles. Since tne midd.e of July these iore.gn interests . have withdrawn over £2oj,'00b, UJ0 of tlie funds they had in London. ’ll* re is scarcely a country that could stand such a drain, and going off the gold standard was the best and most drastic step that could have been taken to meet a, desperate situation.

it will he noted that the London .Stock Exchange was uosed lor two days and several Continental Bourses wore also closed. By this notion loieign holders. .and withdrawing the foreign holders of British securities were prevented from-selling their i.o clings and withdrawing the proceeds from London. The two days rasp, to will have given both buyers and sellers time, to calm down and take a saner view of the situation.

The prompt and determined action of the British Government is worthy of all praise. It was towards the end of August that the. Nationa. Government, was formed at the. suggestion of His Majesty the King. Parliament was enllc.tj. in, session for. September ,8 and hvj September 16 the Budget was balanced, huge economies were made and.huge taxation imposed. On Friday .last, September 18, the economic position became serious. Prompt measures wore, taken. The Bank of. England was authorised to suspend the Sale .of go 1 d; and the Bank itself raised, the minimum discount rate from 'fv to 6 per cent, and that too on a Sunday, and both movements were uii■precented. The Bank has never previously raised the discount rate hv H per cent nor, lias such action been taken on a Sunday. On Monday last the Act suspending the gold standard was pass ed promptly and courageously. Contrast this with the method of d«a'ing with our own economic conditions which are relatively quite as serous as those experienced in other countries. Three weeks were spent in taking evidence and the nter- Party ended its career in a fiasco. It lias taken about five days to form a National or Coalition Government, and not without . bickering as to who should and who should not be in the Ministry and the Ministery itself wants about ten days or a fortnight to formulate a policy. ■ ’ ’ : >

Good must result from the determined action taken by= the British Government and there is a/wonderf ul amount of truth in the opinion exm’Cs|cd by the “News Chronicle” that “the .silver lining -to the cloud is that the very extent of the depression at last- will •compel i ntc'rh ati on ah (notion tb set world trade) on a firm foundation.” According to "Mr Carl Snyder, Statistician to the Federal Reserve Bank of New“Yb'rk, the whole economic deprcs~ ; si on is due to the fact that gold is concentrated in a few countries.

That would not have happened if those few countries, and the United States in particular, did not,shut out imports with prohibitive tariffs.- Britain going off the tariff is good news for us, there should follow an improvement in the prices for our export products, Eastern countries should also benefit and trade should be stimulated. ... Mif-j:’