MEETING THE SLUMP

Hokitika Guardian, 13 June 1933, Page 8

MEETING THE SLUMP

ACTION IN THE UNITED STATES. ■ LEAD TO WOULD. CONFERENCE. AUCKLAND, June 10. “AVlilife recent events in the United ST ate A iiuve been disturbing to the ; peace of mind of tlie world, yet she seems at last to have girt her loins for the fight with depression,” said Piotessor H. DeLh..w, prorcceor °f ’economies at Auckland University, in a lecture last evening. “By her positive action, even although it may be mistaken, in the ■domestic sphere, and her declaration of foreign economic policy, the United States has given a le,d to the World Conference,” said Dr. Belohaw. “It "will be a strange but pleasant tiling Tf the United States, at long last, is to lead the world back to lower tariffs and freer trade.”

The lecturer traced tlie course of events in connection with the numerous' hank failures in the United States from 1929 onward, culminating iii the declaration of. a “holiday” on th-ei day. President Roosevelt took office, and the subsequent remedial steps taken by the passing of the Banking Act; 1 V

“This legislation drove the United States off Lie gold standard,” said Dr liekhaiv, ‘‘and' the denial of tlie Secretary of the' .Treasury was probably made to allay public feeling. The legislation was’''a temporary measure to meet the crisis, but oh April ~J, six u eeks after' its passage, the gold standard was officially abandoned “America’s abandonment of the gold standard was determined veiy differ' imtly from Britain’s- abandonment. The United' Kingdom was 'forced off tlie staikLi’d by ' the' adverse balance of trade and the Heavy withdrawal of foreign balances, leading to heavy -withdrawals of gold. I'lie main, explanation for America s decision is to be found, I think, in the intention of the Administration to promote internal currency and credit expansion to raise prices. From this distance the abandonment of the goal standard ' would seem to be part of a larger Isclieme of national rehabilitation. ' “The world effects of America’s decision are difficult to evaluate,” said 'the lecturer. “The first effect will die to remove Lie gold anchor from exchanges and Tender them mere, susceptible to fluctuation unless stabilised by some met bed similar to that jidoptad in the United,Kingdom, which established aft exchange equalisation fund.

“The second effect will be to enhance the prestige of sterling. Only France, Switzerland, Holland and Bcl-gi-itiif*ivo.w . remain. on the. -.gold.standard., and the leadership in, fiji*r|re ,*s. again likely 'Mto prss . to (London.*, America’s action also removes one impediment to action at the World Conference try deal with* interna-tionlal currency 'stability, s ; nce there is no longer a fear that the United States will press f°r all early, return to gold.