The Maui news. [volume] (Wailuku, Maui, H.I.) 1900-current, 1922-03-31
Plan for Financial
Reform Formulated
To Steady Exchange

LONDON, Feb. 81 - ASSOCIATED
Press MaiD-A plan of financial re-
form has been prepared by the ex-
ecutive committee of the Sound Cur
rency Association of Great BRIAN and
sent to the Chancellor of the Ex-
chequer for consideration at the pro
ence at Genoa.
Stabilize Exchange
The committee asserts that "vio-
lent fluctuations in the rate of eX-
change between countries are among
the principle causes of the present
worldwide depression of trade" and
that these fluctuations are partly due
to the disorganization and %depreciat-
ed condition of the currencies of
various countries.
1t asserts that excessive govern
ment expenditure and il~l-regulated
budgets contribute to the disorgani-
cation of exchange.
To meet this situation, the commit
tie proposes the following methods:
A decision on the funding or ad
justment of inter Ally war debts and
German ~reparations.
Drastic economy in administration
with a view to reducing taxation and
the cost of production and thereby
stimulate trade.
Restoration of an equilibrium in
the budgets of the various countries
throughout the civilized world.
Removal of all artificial barriers to
the free interchange of commodities
between nations.
Au a q net atom vrva al $40 AzNahIs.I
ing the par of exchange between gold
standard countries, the committee ad-
vocates the gradual contraction of
paper currency in all countries where
there is an excess.
Difficulties Met
The committee admits that it is not
easy to decide how best to reduce the
redundant currency but suggests that
one method would be to convert the
excess into funded debt.
When par of exchange has been re-
stored, it says that prohibition of the
export or melting of gold coin should
be removed.
Some European countries, says the
committee, probably will not be able
to restore their paper currency to its
pre-war parity and a fresh parity may
have to be established; but it is de-
clared to be certain that a" currency
system based on gold must be adopt
ed by all countries interested in the
establishment of the general trade
of Europe.
Loans and credits to all countries
should be based only on their own
practical recognition of the impera-
J. tive nnnl pf ,oFDrpo tIo D,it;aI
financiers.
The committee adds that only
through united effort on the part of
all countries to follow these princi-
pies of sound finance are trade and
industry likely to revive. The com
mittee asserts that financial machin-
cry exists in London, New York and
elsewhere sufficient to provide the
necessary credits where the security
is sound. Continuing the committee
declared.
Restoring The Pound
"The United Kingdom should aim at
the early restoration of the old equi
valents between the pound sterling
and 1884 grains of standard gold.
Such restoration would tend to give
stability to prices and encourage
countries with still more deprecated
currency to take the necessary steps
to stabilize them in relation to gold
and so cause the gradual return OF
steadiness in international trade
1.-THE resumption of gold specie
payments in this country would i'm.
m~ediately have a beneficial affec. OF
British national credit. An improve
ment in national credit which would
enable this country to refund the ma
tional debt would save the state
many millions a year in interes'
charges. Other countries having de
preciated currencies are invited by
the committee to organize sound cur
rency associations with which the
British association would be willing
to affiliate.