The Guardian And Evening Star, with which is incorporated the West Coast Times FRIDAY, JUNE 24, 1932. GOLD AND STERLING.

Hokitika Guardian, 24 June 1932, Page 4

The Guardian And Evening Star, with which is incorporated the West Coast Times FRIDAY, JUNE 24, 1932. GOLD AND STERLING.

Tiif. Urgent necessity of there being an adjustment of the price levels of gold and sterling formed the subject of an appeal in the House of Common.s recently by Sir Robert Horne who stated that the crux of the situation was tho fact that production in England at the present time is not only not being carried on at a remunerative' level, hut is being carried on at a loss, which is depleting the resources of the industries of the country, and causing active depreciation of their reserves; In such circumstances no one wishes to venture; the heart of the enterpriser is broken. He seeks to put whatever of his fortune he may have saved into gilt-edgeds securities. Business sags and industry shrivels. A fortnight before it had been pointed out that the price level was too low to admit of production at anything but a loss, that if’ only they could raise prices it would effect a complete change in the picture. It would lead to an expansion of business; there would 'be a great increase in employment. If they could not raise prices he begged the Hou.se to think of what the alternatives were. (Hear, hear.) He scarcely imagined that in any part of the House these inevitable and inexorable alternatives would be welcomed. They were that there should be a forcing down of wages, a compulsory cut in the interest derived from vested interest on securities, and they might have to face so dire a device as a capital levy. It is going to he a very close thing between tlie survival of civilisation ns we know it and its decline, Measures must be taken which are appropriate In the circumstances in which we live. Everybody who is engaged in business to-day knows that there/fa not a moment to lose in taking a step which is necessary to save the industries of thio country and the trade of the world. It was the responsibility of the Government- to conduct our monetary affairs, and the Bank of England was nothing move than a servant of the Government. If the Bank of England bought Government securities It released cash in the market, and increased what was known as bank cash. If the Bank bought securities in large volume, then, while releasing cash in large volume, it became eager to lend, and if the hank rate were lowered it would make the borrower more eager to borrow, and in that way we should, in normal circumstances, achieve thle object. There- are people who think the argument is finished. when they mention the word inflation. There is no more merit in deflation than in inflation, and there is no more disgrace about inflation than about deflation. You can have to much or too little. If you have too much you have anoplexy; if you have too little you have anaemia. There is, handily, a stage between the two. Deflation has gone to such a disastrous extent in this country that it is time to reverse the process. You mw call it reflation or expansion of credit, but something in that nature should be done.