Evening star., 1932-02-11
GOLD HELD VITAL
TO WORLDS TRADE
Giving Up Standard Would
Cause Starvation, Says
A. B. A. Official.

Special Dispatch to The Star.
NEW YORK, February 11.-Chaos in
the world for an indefinite period would
follow abandonment of the gold stand
ard, but such action is not conceivable,
either in the United States or through
out the world Fred 1. Kent declares in
an article in the current American
Bankers Association journal M.
Kent is chairman of the associations
Commerce and Marine Commission,
which conducts its investigations in
international trade and finance.
1T is quite impossible to carry on in
ternational trade in this century on 4
basis of barter and if there we're no
common standard in which i'll COM
modities could be measured, starva-
ton would be rampant in the world -
MIR. Kent says. When Great Britain
took action to preserve the gold in the
Bank of England until the crisis had
passed and as a result sterling exchange
dropped and there was an enti1e stop
page of international trade in every
country where prices for export and
import had been figured in pound ster-
ling on a gold basis and this Continued
until a new method of arriving at gold
values through the French franc, the
American dollar, or otherwise, was
founG
The measure of the gold standard
is required for the protection Of our
civilization and must be continued until
something else as effective has net only
been provided but can be put into force
at the same time that gold might be
abandoned as a common measure At
present gold is serving its purpose per-
fectly as a commodity price measure
for the exchange of goods between ma
tlons."
Mr. Kent, citing talk about the .ack
of balance in the distribution of the
worlds gold supply as being responsible
for the difficulty of the depression de-
clares that actually such distribution
has absolutely nothing to do with the
depression.
1T does, however, measure what has
occurred in the past that has resulted
in gold seeking its present resting
place" he says. "One would think from
what we often hear that every country
should have such supply of gold that
it could go on importing without eX-
porting the equivalent and be able to
pay balances in gold indefinitely. Sucn
an idea is so absurd when so simply
stated that it is hard to conceive OF
any one believing such a situation as
UtuiS Gillltl DCoSlDlC vi utoll dplC IL
goes without saying that no country
can borrow and import in excess of its
exports constantly year in ard year
out, without reaching the breaking point,
and that if it undertakes such an eco
noric progression in trade, such gold
as it has will naturally disappear and
it will ultimately find itself unable 70
continue its unbalanced trade"
We must come to the conclusion, Mr.
Kent says, that it is the unwise acts
of men in governmental extravaganza
in excessive taxation, in raising trade
embargoes. in overborrowing, and in
the exercise of bad and unfortunate
politics that has caused the great depth
and length of the depression through
which We are passing.
Gold has no part in it, although it
does measure with great vividness the
results of the mistakes of mankind" he
adds IF. however. men wish to see
chaos in the world for an indefinite pc
-iod during which life itself will be a
veritab,e burden. all they need to do
is to abandon the gold standard"