GOLD STANDARD

Hokitika Guardian, 14 March 1932, Page 5

GOLD STANDARD

BRITAIN’S ATTITUDE COMMENT IN THE HOUSE, (United Press Association.—By Eleetrie Telegraph.—Copyright.) LONDON, March 11. , In the House of Commons, Mr L. Hore-Boiisha, for the Government, ‘moved the precautionary re-enactment .’of tile Gold Standard Amendment Ac| ”fov a< period of one year Jr Mr HortfBeKsha said that happily the prediction that '.ho going off gold would cause food exploitation had been i'alsifieS. Indeed 'mauy gold countries had linked their fortunes and prices with ‘Britain's, with the result that 59 per cent. 0 f the food was now imported from non-goJd countries. To that extent possibie damage to Britain’s household budget was restricted. Furthermore, the strength of Britain’s purchasing power abroad had hir duced some countries to adjust, Themselves to Britain's purses. The wholesale prices of gold countries had fallen nine per cent., which further restricted the area of the damage. Many foodstuffs. including Australian and New Zealand butter, were cheaper, The ' average reduction of all foodstuffs was ' ten per coat- compared with 1930, , Mr iA, M. 'Samuel urged that Britain ' thuuid have the power to dot"end herself, The influx ,of gold forced on her might have peculiar rO. suits, even forcing her back to the gold standard if there was a ..flight from the franc or dollar.

■The Bill passed its second reading without division. > -

An important 'statement on the pound sterling and the merits of a managed currency was made by the Chancellor of the Exchequer in the House. The Chancellor declared that the Government did not desire to see the pound forced up at a rate that would be injurious to industry. He could not forsee the ultimate time or rate of stabilisation, but he took the view that .sooner or later Britain must link lier currency to a metallic- basis.; He saw no better basis than gold. ! “it had been .suggested during the debate that we might be forced back to the gold 'standard and into buying gold,” he aaid, “ but that contingency i s so remote that it need not be' considered.” He thought that it was an entirely mistaken view that the United States would be forced off the gold standard. The measures taken there had been wisely conceived and were having an effect in the States, which might prove beneficial to the whole world.

•He agreed that fluctuation of the value of, the pound was most-detri-mental and that the speculation taking place in sterling was injurious and disturbing to trade. Obviously the power of managing currency had diminished when they had such an enormous volume of s hort-term money available throughout .Europe. If they were to manage currency it would have to - be done OU a very large scale, As to the ultimate policy of the Government, he expressed the purely personal opinion that he was not attracted by the idea of managing currency, because, sooner or later, Britain would find that she had to link her currency to a metallic basis. Whetner they .should stick to gold, or mix it with something that would help them out, he did not know but he did not see any better basis than gold, which ni the past had served them well. Although for the time being the currency was a managed one, it shouM not be assumed that the Government intended that it was going to be a permanent policy. The MacMillan Committee came very definitely to the conclusion that if there was management it ought not to be in the hands of the Government, but in the hands of a central banking institution, and with that he freely concurred. ,