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Hokitika Guardian, 23 June 1932, Page 4

In an interesting statement in its monthly letter the National City Bank of N'ew York reviews the efforts of the Federal Reserve Bank and the Reconstruction Finance Corporations to extend credits and revive industry. It then deals, as follows, with the international aspect of free stabilisation:—The inauguration of this policy on the scale now contemplated may result in the development of world co-operation by central banks for the more effective control of credit and prices. Obviously the banking system of a single country cannot exercise tli e control over world prices that might be exercised by the banking systems of a group including the more important countries, acting together. The prices in different markets of commodities entering into international trade are interlocked, and while they react upon each other they must move promptly together, or the lagging ones will be a drag upon tlie others, Moreover, there is danger that a country leading an advance may lose trade by it. But all countries have a common interest in the stability both of credit and prices. Able economists have maintained for years that the central banks of the world p**>s(>ftse<l the requisite organisation and power, acting in co-operation, to stabilise the state of credit and the general price level to such an extent

as to prevent the wide fluctuations which result in panic and disorder. Practical bankers have admitted the leal .-eundnevs of the principles involved, hut feared popular opposition t> anything that looked like intewtiona] control of money and credit. Such co-operation, of course, would not attempt to> control particular prices, and probably would not nftempt to do more with general price movements than iveveiit the wide swings that result from cxces ive inflation] and deflation of credit.