WELLINGTON NEWS

Hokitika Guardian, 22 December 1931, Page 6

WELLINGTON NEWS

SILVER AND GOLD. f (Special Correspondent). WELLINGTON, December 20. Mr J F. Idling,, a director ol the Midland* Bank, the largest bank in Britain, has suggested a plan tor an Empire-currency under Britain’s moneeary leadership. Darling, speaking at the Textile Institute, Belfast, said: “\\ e should envisage the creation ol a monetary imperial unit as well as the pound and ‘oth,er currencies will be based, making it so strong that the dollar, franc and other currencies could not afford' to remain independent of it. Nature yields 14ozs of silvei for each ‘ounce of gold which is now valued at seventy fold that of silver. The solution vis to revert to nature s ratio and employ both silver and gold as, money imparting thereto a relative value commensurate with their national value.” In point of fact Mr Darling is an advocate of bimetalism, and he will receive great support in Canada, the United States and Mexico, and in Australia also where the white metai is a by-product of certain mines. , Since the break of September 20 last the price of silver in terms of sterling has risen from 13d to 20d P*-i standard ounce. The advance lias been partly an adjustment to a. lower value of sterling, butfthere has also been a rise in tennsf ol.’ dollars. Advocacy of measures for ipqsliing up silver value still higher is hovv very loud and there is niudh Prespgupport for it. In the •'‘Technical Weekly Press” approval is intimated for' snfcli proposals as are made in the “Report on Empire Monetary and Financial Policy,” issued jointly by the Federation of British Industries, and the Empire Economic Union. : M*

The authors of this report point to the coincidence ■of Germany replacing a silver currency hv a gold currency (in 1873), with :a long period of falling prices and industrial depression. The committee says: “The tall in silver in the last three yfears and indeed ever since 1873, may truly he described as an artificial fall mainly due to the action of Governments in demonetising or disregarding silver.

It can hardly be doubted that there would he advantages to the world as a whole in raising the price of silver as a commodity, at any rate to a lormer level. The committee issuing the report limits its support of a bi-metallic programme in two wavs (1) Rather than suggest that silver be remonitised as currency or made legal tender at a definite and permanent ratio, they advise that the central Irnnks be authorised 'to k.egp g perceiMge of metallic currency reserve in silver at the market price, which when old is held as ‘backing’ for notes, as is still the case in England even to-day, must be the gold price. (2) They insist that in a stable and financially highly developed community neither gold nor any other metallic hacking is required to support an internal note issue”, and that if this were recognised, then the gold now held by the central' bank would be ample-1 for the purpose of settling international balance. - . This is a revival of Bimetalism which was strongly supported by many leading men on both sides of the Atlantic, including the late Lord Ballour and the late H. J. Bryan of the United States; who stood for the Presidency on one occasion. Bimetalism is supported to-day by Mr Aniery, Sir Robert Horrid, r Sir H. Cunliffe-Owen, Sir Henry Deterling, “Mr F. F. Darling and in the United States by Mr Guggenheim and Senator Borah. It is contended that every fall in the gold price of silver proportionately curtailed the purchasing power vf the silver-using nations, As a corrective to this the Economic Research Institute of Germany has issued an opinion in which it is remarked that to say that twofifths of the population of the world uses silver as currency is a very imperfect indication of the world economic importance of si Iyer. . ' It must not be forgotten that such a vast territory ;as .Ch'hia is in its present stage of economic development only very partially affected by changes in the (external) purchasing power or the metal currency. Only those parts of China which are in business contact with gold-currency countries feel such changes. Only small portions of the Asiatic silver hoards are used for buying goods, and in this position the total loss incurred through the fall in the silver price is much smaller. The restriction of imports by silver-using countries has not been greater than by other countries.