Evening star., 1932-11-19
BRITISH RETURN
TO GOLD DELAYED
Banking interests Dislike
Trade Loss, but Early
Relief Unlikely.
RY the Associated prNss

BY the Associated Press.
Reports to the Federal Reserve Board
indicate there is no immediate likeli-
hood of Englands return to the gold
standard.
No less an authority than Sir Hilton
Young, British representative to The
Hague Conference, was quoted as saying
that the return to gold can be effected
in and when certain monetary. financial,
economic and political conditions are
ironed out
The statement was described as a re-
affirmation of the British governments
attitude, made necessary at frequent
intervals to prevent not altogether dis
interested quarters from spreading fresh
rumors about our imminent return to
gold"
In the meantime 1t was said that
British banking quarters engaged main
ly in international business are regard
ing this delay in returning to gold with
growing dissatisfaction So long as
sterling is subject to fluctuations, their
foreign customers are reluctant to draw
upon their sterling credits, it was said,
as they do not want to be exposed to
losses through an appreciation of sterl-
ing. AS result, when a violent move
ment in sterling occurs the banks re-
ceiVe many requests from foreign Gus
toners to transfer their sterling credits
into dollars.
Fear Losing Customers.
The banks, it was said, are not in q
position to comply with these requests,
and fear that, should this state of con-
dition continue, they may lose their
best customers.
The London Financial News takes a
philosophical view of the situation and
declares that the loss of business will
be only temporary "and-regrettable as
it is-the banks will have to put up
with it," The publication declares that,
taking long view, q second suspension
of the gold standard after premature
return would do far more haI,a than
the postponement of the return to gold.
British authorities declare the recent
fluctuations in their currency were due
to two main reasons: First, that the
international exchange markets have
greatly increased in sensitiveness, owing
to the reduction in volume, and even
more in value of international trade:
secondly, that sterling and its associat-
ed currencies are no longer on gold
standard, but are independent paper
currencies, free to fluctuate with every
change in international payments, ex-
cept so far as the authorities exercise
control.
Advices to the Federal Reserve Board
state that even an independent paper
standard can be prevented from undue
f1uctuation and kept near its pur-
chasing power parity, provided ade-
quate exchange resources are available
| for use at the discretion Of the none
| tary authorities. Such pegging, how
ever, it was said, is dependent on two
conditions that must first be fulfilled;
| the exchange resources in reserve must
| be adequate, and the authorities must
have definite idea as to the position
of the purchasing power parity.
Amount Is Unknown.
Whether the first of these condi-
| tions is fulfilled in England, the pub
lie has no means of knowing. Not only
is the amount outstanding not known,
except to few persons in authority,
but any Judgment as to its adequacy
must be conditioned by the uncertain
ty which exists concerning the pay
ment of war debt inStallments next
month.
AS to the second condition. authori-
ties hold they have little definite
knowledge of the desirable economic
rate at which sterling should be sta
bilized in terms of gold. BY allow
ing sterling to find its own level after
the suspension Of the gold standard,
some approach to the true purchasing
power parity was known, but since the
beginning of 1882 much has happened
to disturb that relation.
The advice added that at present no
reliable criterion is available for de-
Gliding how far the depreciation OF
sterling is justifiable. and at what point
il becomes artificial and calls for in
tervention on the part Of the au-
thorities. THAT uncertainty must re-
main until we return to a universal
basis of values, that is, to gold" bank
ing authorities aver.
EurOpe Tries Barter.