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Hokitika Guardian, 1 October 1931, Page 4

Commenting on the report of the Macmillan Committee on banking, finance, and credit, Barclays Bank Monthly Review says the manner in which the gold standard system has operated since its restoration, by the principal European countries after the war has differed considerably -from the way in which it functioned prior to 1914. A much greater degree of currency and credit management hn.3 been introduced by the various central banks and there has been a tendency to restrict the automatic character of the system, which formerly, used to be considered one of its greatest safeguards. During the last two or three years, both the United States and France have not employed the amounts due to them from abroad in the way in which Great Britain as a creditor nation has always employed hers, namely, in additional imports or in making additional foreign long-term loans. On the contrary, they have required payment of a large part of their annual surplus either in gold or in shortterm liquid claims, their high protectionist tariffs tending to prevent their debtors from paying in goocre. The writer quotes a summary from the report showing the distribution of gold in central banks and treasures between creditor countries (Great Britain, the United States, France, Belgium, Hollaed, Switzerland, and Sweden) and debtor countries (all others, excluding Spain and Russia.) This shows that at January Ist., 1929, of gold amounting to •£1,957,000,030 creditor countries held 60 per cent.; on the same date this year their holdings were £287,000,000 greater and represented 74J per cent, of a total of £2,095,000?-' 000, those, of haying*, declined from 35 to 25£ per cent. There, is obviously a limit to payments m gold by the debtor countries and a breakdown is inevitable unless the movement which has been taking place during the past two years is arrested. The position has been greatly accentuated by the reparation and war debt payments. The broad principle upon which international trade is based is an exchange of goods between the different countries, but if the reparation and war debt annuities are effectively to be made, they involve not a reciprocal movement, but a flow of goods or gold in one direction only.