The Guardian And Evening Star, with which is incorporated the West Coast Times. FRIDAY, AUGUST 18, 1933. THE MONETARY SYSTEM.

Hokitika Guardian, 18 August 1933, Page 4

The Guardian And Evening Star, with which is incorporated the West Coast Times. FRIDAY, AUGUST 18, 1933. THE MONETARY SYSTEM.

Ihe late London Conference failed to make materia] advance because of the itmvLlingness 01 America to stabilise currency, as desired by the European cowers particularly. The American plans were to raise prices to contribute u> a general economy recovery. Tbe currencies of Europe, however, show much divergence one with the other. Tnere were those -on the gpl(l standard and those off the gold standard, while others Rad no stable basis. Francs and the other gold standard countries, took the stand that sabilisation was of prime importance do that there would be a definite unit for money values. They, of course, wished to adhere- to gold, because the ‘difference in currencies had a fluctuating effect on national credit, which, is often affected as much by money speculation as by trading influences. Britain, off the gold standard is not keen to return to it, and the bulk of British financial opinion seems to be veering to a. managed currency safeguarded by international securities, thus encouraging trade in the desire to maintain a- favourable balance. Had therefore, the United States not raised a barrier at the outset of the Conference, insuperable difficulties were likely to arise later by the contending parties for and against the gold standard, or with an alternative of trading in goods and services to secure international currency. Of course, in the latter event the difficulty' would be (as at present] to secure a fixity of exchange to prevent undue deflation or inflation, but it' is"'ließFby influential advocates of . such a scheme to replace gold, which, is A'* 1 declining quantity and therefore a source of tmcertainty by its fluctuations, that the difficulties can be overcome, and In any caso would be less serious than under existing conditions which are most difficult and uncertain, because all tho nations are not bolding adequate gold reserves. But it should lie possible to create trade and intercourse were stable conditions reached under managed currencies on which there was international agreement. 11l other respects there was a good deal of agreement between Great Britain and the United States. Mr Roosevelt. is busy trying to force up the level of prices, and Mr Chamberlain declared at the Conference that it was essential to bring about recovery in the world level of wholesale commodity -prices. The present state of world currencies has produced a condition of affairs which is deplored, and the competition which is going on in regard to tariffs and exchanges Is >a great contributor to the trade stagnation. If the nations could be brought to realise the need for cooperation, the situation would be helped. But the United States’ action at the very outset prevented any attempt at a real advance, and matters are not any better yet. The United States is attempting a great national financial reform which on the whole is viewed with much misgiving, but the President is bent on his purpose and is proceeding courageously. Mr Forbes lias looked in at "Washington to see tbe President in action, and learn first hand what is being done. -It is a fine opportunity tio see the inside workings and to measure the possible results, and it is hoped New Zealand mav he able to profit by Mr Forbes’ enlightenment.