Evening star., 1931-12-20
WORLDWIDE FIGHT WACED
TO DECIDE FATE OF GOLD
No Let-Up Seen in Paper Proponents
Attacks on L. S. by Rumors and
Press Campaigns.

money countries and adds: The paper
| standard countries. by forming a COM
mon monetary system. would immensely
strengthen their position in relation to
the gold standard countries. If later
there should be negotiations with these
countries with the view of re-eStabllsh-
ing the gold standard generally, these
paper countries would then be in posi-
ton to lay down their own terms
Leaders Opinions Obtained.
The International Chamber of Com
merce has entered the debate. Its Paris
headquarters has obtained the formal
opinions of two leading financial minds
in Europe-Sir Arthur Salter, British,
former head of the economic and finan-
Cial section of the League Of Nations,
and Robert Mason. French. president
OF the Credit LyOnnalS Bank and one
Of the directors of the International
Chamber of Commerce.
Sir ArthurS thesis briefly is as fol-
lows: There is no absolute shortage Of
gold. but maldistribution. France and
the United States have too much, while
| others have not enough. A good deal
of the Franco American gold is partly
withdrawn from use and gold prices
have fallen in the last two years 80 per
| cent
There are only three ways in which
international debts can be paid BY
exports of goods. from proceeds Of new
loans or with gold But tariffs block
exports, political fears and agitations,
destroying confidence, prevent loans
and debtors lack gold
Hopes for Return to Gold.
Sir Arthur opposes silver and thinks
the So-called managed paper currency,
In which the amount Of paper printed
would be strictly limited, is feasible,
but difficult and dangerous, and hopes
for a gradual return to the gold stand
ard under these conditions;
!. Remove artificial price and credit
restrictions so that the gold standard
can work normally.
?. Let the central banks cooperate to
stabilize prices around the 1929 level
3. Restore political confidence so that
credit can function normally.
4. Help the resumption of gold paw
mentS by reduction of war debts and
leparations
What M. Mason says is this: Some
stable measurement for value in inter-
national trade is essential Nothing as
SerVlceable as gold has yet been found
Consequently countries off gold will
ultimately return, the only question
being at what level they will stabilize.
The ideas Of managed currency are
attractive theoretically. but practically
they are dangerous and probably un-
workable
The alleged maldistribution of gold is
not due to some defect in the gold
standard. but to political agitations
which destroy confidence in the minds
OF investors and prevent new loars
where capital is most needed. No sys-
tenn can work well in the time of an
acute crisis. The moment confidence
is restored, capital will seek places Of
tering high interest rates or rising prices
and the economic balance will be re-
established. 1t would help if all new
1orelgn loans were made international,
that Is to say quo;ed In all leading
centers, so that the bonds could be used
as medium of international exchange
Meanwhile there is more free capital
in the world seeking investment than
ever before This capital. when moved
too suddenly from place TO place. can
cause grave SturbanccS Banks should
therefore cooperate to check undue
speculation, private business should not
abuse credit by overborrowing and gov
ernmentS should be careful not to scare
capital away by unnecessary agitations.
Copyright, 1879