CURRENCY AND GOLD

Rotorua Morning Post, Volume 2, Issue 549, 5 June 1933, Page 4

CURRENCY AND GOLD

Franee is going to the World Economic Con'ference "fearlng that the consequences will be ineffectual unless the great countries stabilise their currencies." And in currency questions France is entitled at the moment to speak with some authority; she is the foremost of the few countries remaining on the gold standard, although only becausq she herself went off gold and got back on again before going olf became fashionable. That was in 1928, when the gold value of the franc was written down by four-fifths. If liow the rest of the world accepts the French advice to return to gold, the return probably will be in keeping with the French example of devaluation. As the "Economist" remarked last month, few persons would seriously advocate a return to gold if it implied an attempt to maintain traditional gold parities without regard to changes in money ineomes. "The real choice now before us is between a purely managed paper currency and a modified gold standard in which the use, and if possible the value, of gold would be regulated by international agreements Gold or no gold, ihe conference will have to arrive at some sort of order in currency before it can hope

to make much headway toward commercial restoration. It is tolerably plain that one of the objects of America's going off gold was to hasten the world's return to monetary stability; and not one of the nations will dispute the dangers of prolonged instability. It is proper to recall that gold itself has not proved notoi;iously unstable; the gold standard has broken down not froija any inherent defect, but through

abuse of its working. Therefore a relevant fact in any consideration of future standards is this : Can we trust man after his failure to manage gold (in which stability is up to a point inherent) with international paper, whose whole stability will depend upon the manner of its management Caution, counsel^ sticking to a precious metal.