The Guardian And Evening Star, with which is incorporated the West Coast Times. WEDNESDAY, ABIDE 20, 1933. DEPRECIATION OF CURRENCY.

Hokitika Guardian, 26 April 1933, Page 4

The Guardian And Evening Star, with which is incorporated the West Coast Times. WEDNESDAY, ABIDE 20, 1933. DEPRECIATION OF CURRENCY.

Tiie sudden departure of the United Statc'o from the gold standard, despite cue large holding of gold in the con try, on the eve of tn,e, international overtures, has created an entirely row atmosphere for the deliberations. The Ameiican move was a surprise one, and lias taken Britain and France, the principals in the coming overtures, by surprise. The act of going off the gold standard was no doubt to endeavour to improve the trading position. Britain was forced off the gold standard, when th© holdings of gold were diminishing, but the United States hag acted similarly without that special reason. The action of America will no doubt alter the complexion of things >at the international conference row in progress, and there will of necessity he a readjustment of views as a result of the new state of affair? Just wlrat going off the gold standard means D set out in a late issue cf a contemporary, and the review o f the economic problem involved is of interest at this juncture. The International Chamber of Commerct has coined a phrase, “racing down hill,” to describe the struggle of nations to depreciate their currencies and so gain advantages over each other in world trade. In a review of the movement published in the latest issue of its official journal the chamber claim,? that it- is necessary to inaugurate >a movement for.ra general rot urn to gold. Unfortunately, it adds, marrying currencies to gold ie not unlike human mairt'iage; it is to say “Yes,” hut the arrangement will down unless certain collateral • conditions 'are observed. The many proposals eagerly canvassed in regard to monetary policy, the chamber -states, give the impression that there is still not a sufficiently general understanding of the importance of an international standard of value, When the common standard is abandoned and the currency divorced from gold there is no barrier to a competition in depreciation among the various countries, and voluntarily or involuntarily they move in that dir ection. In an isolated instance a depreciation of currency gives the country in question a temporary advantage by way of an export premium, but the moment the same tiling is done hv others it becomes a race in currency depreciation, the only absolute limit of which would be the worthiness of all currencies. “Under a condition of currency instability the transaction of normal business through accustomed channels becomes difficult, uncertain, and- costly,” the chamber proceeds. ‘‘The lack of fixed relationships between th.? ; various currencies of the world turns normal international business transactions into a gamble. It creates further government interference with the free passage and exchange of goods, and provokes sudden and abnormal tariffs and other barriers. Sterling fluctuations last year on one occasion wiped out, on another occasion double, the 1.0 per cent, general duty imposed by Great Britain in March. 1032. The effect of depreciated currencies on the United States tariff, and on the whole industrial structure of the country which is. linked thereto, may lie judged front the fact tbnt Imports from 'depreciated currency cram tries I‘rnm tffe first half of 1932 mil only 7.7 per cent, below the email tity for' the corresponding period o; 1931, while imnorts from gold T>. ~r countries showed a decree,:-o of 3l.fi mor cent. Seven depreciated onrronev emm tries showed a:i actual increase “To this situation.” the review add? “tWe sre»"? only one answer. It cannot l o a general snuve qui pent down the- hill of uuivcrs.il cp’tcucv depre-i'-tio-i. Jt cr.r he the punsunn.'e of a nil icy of international 00-oneration and mutual concession in deali"g with the causes of track disorder a’P-l currency confusion, and of measure' which wil l '-rouse confide-oee rathe 'halt alarm in cehiial. and pvt i'ho cur ronev and e-'-Rt tn. w«-V again.”