Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-09-21
Britain suspends Gold Standard.

The British government has acted
drastically to halt the drain of gold
from the Bank of England and to pro-
tect the pound sterling. suspending gold
payments. The action was taken 10
meet an emergency which was becoming
more and more acute, as the with
drawal of gold from England By credi-
tors has proceeded. The suspension OF
the gold payments affect, so far, no
obligations of the British government
or of the Bank of England which are
payable in foreign currencies. 1t does
affect, however, ell internal obligations.
all payments which are to be made in
England on the pound. The law which
the British government has ordered
suspended provides that the Bank CT
England must sell to any person VINO
makes demand in that behalf, and pay
the purchase price in any legal tender,
gold bullion at the price of three pounds
seventeen shillings and ten and one
half pence per ounce of troy gold, but
only In the form of bars containing APP
approximately 400 ounces troy Of fine
gold.
A statement issued by the British
government asserts that the resources
Of the country are enormous and that
'there is no doubt that the present ex-
change dificulties win prove only tenn
porary." It points out that the British
government is already taking steps to
secure q balanced budget and that the
internal position of the country is
sound.
The British government, since the
World War, has been the only European
government involved in that struggle
which has not drastically readjusted its
financial situation even to the extent of
reputation. For while soon after the
close of the wpr the pound sterling
dropped in value TO about 1925, it is
true, and at that time the gold standard
was to all intents and purposes mop
erative. But the British eventually
returned to the gold standard and sta
bilized the pound at $4.85.
What is to be the outcome of the
present situation in Britain is still q
matter Of speculation. II the British
sre finally compelled to devaluate the
pound, q readjustment which viii be
extremely painful to those who hold OBJ
legations Of the British government
within that country, debts viii be wiped
on at the lower valuation. France re-
duced the value of the franc until it is
only cne-fifth of what it was before the
war.
Doubtless there viii come renewed
demand for re-establishment of dou-
BILE standard including silver and gold,
to take the place of the gold standard
which has been in effect in England
since 1916 and in the United States
since 1873.
The British government has made 1t
clear to all British citizens that it will
not tolerate attempts on their part
further to complicate the British ex-
change situation by buying foreign ex-
changes, except in cases where these ex-
changes are needed for actual business
bfdLlSdCtloflS. Inc governments AcAEo
that individuals may undertake to pro-
tect themselves by getting their wealth,
rs far as possible, converted into dollars
or francs, In their fear that the pound
sterling may be eventually greatly
deprecated.
Charges have been made in the Brit
ish press that the present situation in
England Is due in part to boarding OF
gold in this country and in France. The
American Government, however, has
recently called attention to the fact
that the flight Of gold TO the United
States has not been because Of de-
sire to hoard gold here, but rather be-
cause of the effort on the part Of
persons in ether countries TO nnd safety
for their wealth.~~
The opinion expressed in this eoun-
try in informed quarters is that action
taken by the British government. even
to the extent of temporarily suspending
the gold standard. TO put her financial
house In order cannot fail to be Of
benefit to the rest Of the world, In