BRITISH FINANCIAL POLICY

Hokitika Guardian, 21 June 1932, Page 2

BRITISH FINANCIAL POLICY

PLAN OF INDUSTRIAL DEFENCE.

Industrial and monetary policy in Great Britain is the subject of a report prepared by the Federation of British Industries’ recently. The report argots that a recovery of British trade is -impossible' unless steps are taken to draw up a comprehensive plan of industrial defence and development. An end must be made of lending British'money to industrial rivals in Eur-

ope, it say.?, and British savings liencelortli must be devoted to British industries at home ail'd iu the Empire, and to countries outside -the Empire which arc prepared to co-operate in a Bi it-isli system by offering for exchange goods and services of a noncompetitive kind. ■ The federation concludes that the gold standard as it operated before the war. was iu fact predominantly a sterling standard, and that the breakdown of the gold standard in Great Britain in September marks the final failure of the attempt, probably foredoomed, to recreate alter the war the puie-war international monetary system. In her efforts to achieve this, Great Britain lost sight of the true meaning of the pre-war plan, and overstrained her resources in giving financial help to European reconstruction which involved loans to trade competitors.

No\v that she is free from the shackles of a mismanaged gold standard, the l federation suggests that British monetary pojicy must be consciously to adopt a new plan, subordinated to and co-ordinated with commercial and industrial poj’cy; this p’a.n should aim at raising the level of sterling prices to a .level at which production can be carried on at a reasonable profit and at the promotion of stabifiy in the price structure and balanced production within the sterling area. It is' recommended also that, any national savings available for external investment should be directed to countries within the sterling area uliich ‘are countries of complementary trade. .

To promote these p.'ans the federation suggests that the opportunity of the Ottawa Conference should be seized to bring about the adoption of a common Imperial monetary and industrial policy, designed to facilitate the admittance of other countries willing and ab! e to co-operate with the sterling group, leaving fine question of a possible universal monetary .system to be .settled at a later date, if and when monetary internationalism again becomes practical.