Douglas Island news., 1921-01-21

nm NN" NNHN anu N"t NN"".'tA tA"A N"A poses Tho ccnury-old habit Of Eastern peoples. and especially Of those iu India. Co accumulate their savings iu precious metals is well known. Tho vast population of that country. though individually poor as measured by European Ideas. is thrifty and is cumulative capacity for saving great
 "Whuc thcIr inclination to invest bc.r savings in silver has always been marked. Che increased prosper Icy Of mo country and Che change u Che relative value of gold and sIl- vor. i O.. Che rise in the prioo of sil- yer and Che fau in Che price of gold. have as their natural consequence am Increased demand for Che yellow metal for which these Eastern peo- plcs arc evidently prepared to pay moro chan Che Western world is willing to give in order to secure it for monetary purposes The choap- mess of gold has also very naturally stimulated is demand for industrial. purposes in Che West Hence Che material cur,ailmcnt of Che supply 0f gold for monetary purposes
 It is not by mere accident that tho great economic progress Of Che world during Che last quarter Of a century prior to the outbreak of Che war has co.uc.ded with tho steady and material increase ot gold pro- ducuou One may fairly conclude hut hs Increased gold production wos largely responsible tor bringing about Che very general adoption Of Che gold standard, and it is uuneccs- ary Go emphasize the incsumabic value which Che wide adoption of that standard. with lU stabniziug cGoct upon Che exchanges has had upon thc economic progress Of Che world."
 Considering Che prospect ofo dime nishcd world gold output and meas uros having for their object economy In Che use Of gold for monetary pur- poses. as well os Co prevent Che
 value of gold from rising Co its pre- war IcycL Mr. sarkosch told Che conference
 "To prevent Che value of gold from rising means. in other words. to stop Che price of commodities from falling u terms Of gold. b for my part entertain sroat doubt as Go Che possibility of achieving this by international agreement But if it wore possible. what would be Che consequence7 The figures which have given you showing Che mate rial changes in Che uses Of gold since iu price in terms of commodi- ucs has fallen. clearly indicate che eacct of any attempt to dx the value of gold at its present level
 It would lead to materially diminishing world output Of gold, and. what is more. it would divert as it has done during Che last year, an increasing proportion to uon- monetary usea lt is unnecessary Go dwell upon Che detrimental and far- reaching effects which would result from starving thc monetary systems of Che Western world in this man ucr Is not thcn .thc conclusion forced upon one chat it Is neither practicable nor desirable to prevent Che price Of gold from rising in terms Of commodiucs3
 Effect of Price Rise
 "I would add that a rise in tho price Of gold. while probably not inc crcosur Che world output of that metal. win certainly tend Go retard Its decline But what is more im- portaut it win have Che cnect- as m prc-war days-of preventing 90 predominant proportion of Che gold output from being used for purposes other than money. 30 that we may in these circumstances again look for- ward to a very substantial propor- ton of Che gold produced annually being devoted Go monetary purposes.
 "It is true that a rise in tho value of gold conuot.ue as it does a pro- Ionecd process Of dcnation with fall- ing commodity prices would have detrimental effects on trade and enc tcrpr.sc. and consequently upon em- ploymcnt But can it be expected that Che maintenance Of high com- modiy prices by a more or less per- manent depreciation of Che monetary standards win avert these pornIcious effects? I for my part, doubt it The rav1ecs of war have naturally very materially reduced Che real ..I.... .......r. ef fh. r.ruTn ruT