THE ONLY WAY

Hokitika Guardian, 2 July 1932, Page 6

THE ONLY WAY

MEANS OF SALVATION. GOLD' STANDARD MUST BE MODIFIED. - A ' * WELLINGTON, June 29. “To my mind there is only one i thing that will save New Zealand from and the Governmentfrom default within the next two years, and that is not preference, tariffs otr quotas, but an increase in the monetary or exchange value of our exports; alt' other remedies will, in my opinion, fail.” - . • '

This statement as made by Mr H. D. Acland in his presidential address at the' annual' conference of the New Zealand '; Sheepowners’ and Farmers Federation.

“Debt inflation,” said Mr Acland, “is thei great evil the world is suffering from to-day, and this has been brought about by currency deflation. Since my statement last year I am more than ever convinced that the difficulties the country' is facing arte' directly traceable to the deflatory consequences of the, action taken by the financial groups in the Old World from 1925-30, and th,e arbitrary variation by' them of th'e currency basis of all contracts both private and national made during the war and post-war •period. : •»- • -' EFFECT OF DEFLATION. : " l “The effect of the deflation in onr--rencv prices due to a r'eturn to the gold standard has been to make it impossible for'New Zealand producers to supply : af 'sufficient quantity of their produce "at the reduced price to realise sufficient currency to discharge their obligations incurred during the war and post war periods, when British sterling varied from values of 10s to 14s 6d in the £. To make the same currencv payment at that time, requires now approximately three times otilie amount- of wool at present prides and anything from five to six times the amount of store stock. ... The road to international economic salvation would appear to he by the financial group® retracing > their isteps . to that point where it was possilrie to arrange for a basis of uniform value of currency or medium of -exchange of goods to he carried on without undue - interference resulting from a rigid adlies!on to one form of currency. World .trade to-dav was facing a condition Unparalleled m history and orthodox lyjWthods of relief calculated :■ on’ must prove in- >, adequate iti) deal with the present situation. Tile: insane demand from deri tain counlrptes for payment in gold had he belieyejL; been the cause of the present e.crinoinic malaise coupled with the of the debtor nations ; omjpie world-to produce more i3eal. (i*' rea^' ise more .currency from among themSelves to send away in further currency payment of war debts. EMPIRE FINANCES. It might be .found possible for Empire finance at least to be arranged on 1 1 a basis of sterling values in relat : o 1 - to gold or other form of currency to be decided on at such a level as would enable 1 the bulk of the. world's trade to bo maintained bn terms which would allow world producers of goods a sufficient return in the currency fixed to afford them (both individuals and Governments) a.reasonable chance of discharging the contracts, made during the war and post-war period;. The “yicious downward spiral” start--1 ed by deflation could only be broken by removing the causes which had created it; arid that was the'appreciation of gold and their blind adherence to it under impossible conditions. The fall in prices for wool and stock l in New Zealand had in many case.;; j quadrupled the mortgage interest® and ' rents; payable by sheepowners and quadrupled the payments to be made , for taxes, wages and stores, j “The gold standard must be mod'fied,” declared Mr Acland. ' “Great . Britain for its own safety must do- this I without delay, and I believe if this done and a- stable basis of sterling Value for exchange purposes is arranged that our industries will once more enjoy a fair measure of prosperity in the near future.”