COMMITTEE'S REPORT

Rotorua Morning Post, Volume 2, Issue 301, 15 August 1932, Page 5

COMMITTEE'S REPORT

(Press. Assn.-

WHOLESALE PRICES MUST BE RAISED FOR STABILITY INFLATION DEPRECATED

— By Telegrr.ph — Copyright).

OTTAWA, Saturday. The heads of the delegations adopted the currency committee's report and authorised its publication. The report says: — Firstly — A worldwide rise in the in the highest degree desirable. The evil of falling priees must be attacked by Government and individual action in all cases, whether political economic, financial or monetary. Secondly— The Governments represented at Ottawa record their conviction that international action is urgently necessary. They announce their desire to co-operate with other nations in any praetieable measures for raising wholesale prices. Britain's Central Position Thirdly — In investigating how to help to raise prices the conference recognises that Britain's central position, not only among Empire countries but in the world trade and finance, makes Britain a main factor in anything that can be done. The primary line of action in the monetary sphere towards a rise in prices should be the creation and maintenance — within the limits of sound finance — of such conditions as will assist a revival in enterprise and trade. These conditions include low rates of interest, and an abundance of short-term money. The rate of interest on all the various types of loans should be kept as low as financial conditions permit. It is necessary at the same time that these favourable monetary conditions should be achieved not by the inflationary creation of additional means of payment to finance public expenditure, but by an orderly monetary policy safeguarded, if the necessity should arise, by such steps as will restrain and circumscribe the scope of violent speculative movements of commodities or securities. Stabilisation of Exchange Fif thly — The conference recognises the great importance to traders of exchange stability in as wide an area as possible. The complete solution of this probleih must await restoration for the satisfqetory working of an international standard. Meanwhile, and pending such solution, the conference considered the possibility of achieving valuable results in two directions — (1) Creating an area of stability among the countries regulating their currencies in relation to sterling; and (2) avoiding wide day-to-day fluctuations between sterling and gold. Sixthly — The conference recognises that a monetary policy's ultimate aim should be the restoration of a satisfactory international monetary standard. Such standard should function not merely to maintain stable exchange rates between all countries, but also to ensure the smooth and efficient working of the machinery of international trade and finance. This postulates an international agreement among the world's great trading nations.