Evening star., 1936-01-06

standard coun- Dr Kemmsrer.
tries, FOR no gold
standard country will increase the
gold content of its existing monetary
unit,
go If we in the United States sue
reed in maintaining our present none
tary unit of 1871 grains OF gold 70
the. dollar the cost of living will ultl-
matelv increase by at least 100 per
cent above what it. is today as Ee-
suit of forces already in operation
that is by taking up the gold infia-
ton slack now existing.
Revalorization Foreseen.
ca If we continue very long our
present fiscal and monetary policies In
the United States our gold standard
will again break down and there Will
result a subsequent revalorization OF
the dollar at a smaller gold content
than the present one-a revalorlza-
ton that win give us q cost of living
much more than double that of today.
These propositions are made subject
to the following qualifications SIS to
time. The forces that will tend to
bring about the results mentioned
may work rapidly or slowly. Some OF
them are world forces and some are
exclusively American. The speed
with which they work will depend not
only upon economic factors, but also
upon political factors, both domestic
and, International
The pressure, however, of economic
forces already put in operation and
that, for political reasons, cannot
easily be withdrawn, promises to give
these results when they have fully
worked themselves out.
Five Others Remain on Gold.
Today, aside from the United
States, which went of the gold stand
ard in early 1888. and later returned
to a weak form of that standard. the
only nations of importance that still
can be called gold standard nations
in any true economic sense are
France. Poland, Holland, Switzerland
and Belgium.
Managed paper currencies are func-
tioning moderately we'll in some coun-
tries-notably, Great Britain, Canada,
Norway. Sweden and Turkey. In
some other countries they are tunc-
tioning badly.
There is very little interest any
where in the world today in any other
metallic money standard than gold.
There has not been q bi-metallic
country in the world for over so
years and bi-metaiisn is dead.
The only place where for many
years bi-metafism has been seriously
discussed is anaong7a few silver poll
ticians in the United States who think
it would help the silver producing In
terests in their respective States. A
century ago large part Of the world
was on the silver standard, but coun.
try after country gave up this stand
ard until 1929, when the only silver
standard countries in the world were
China, Hongkong. Persia and Ethio-
pia. All these countries except Ethio-
pia are now of the silver standard.
China and Hongkong having been re-
Gently forced on by the fact their
monetary standards were being made
the foot ball OF American politics.
Silver Standard Dead.
This fact that made them give up
silver naturally will make them very
reluctant to return to 1t. Practically
speaking, therefore. the silver stand
ard today Is about as dead as the
bi-metalic standard. The silver pol
icies Of the present administration are
proving to be q veritable Franken-
stein to the selfish silver interests
that were responsible for their adop-
ton.
The prospects for . managed cur
rency standard dissociated with gold
are small, at least for q long time to
come Such q standard would almost
certainly be wrecked within COM
paratively short time on the rocks Of
politics.
The urgent monetary problem Of the
immediate future is not q national
problem of creating in each country
substitute for the gold standard. but
rather an International problem Of
making the gold standard better
standard.
My second proposition is that gold
will be considerably less valuable In
the future than 1t is today. While the
world was returning to the gold stand
ard during the years 1923 to 1929 and
contemporaneously with many i'm
provements In currency and banking
systems involving large economies in
the use Of gold. the worlds gold pro-
duction, after having declined for sew
en- years, began TO advance again and
gold supplies became ample to meet
the rising monetary demand.
Price Levels Stable. ..-.-
AS a result the commodity price
levels in gold standard countries
throughout the world during the pe-
riod of 8 TO o years ending in 1929
were remarkably stable. There is good
reason to believe, therefore, that the
CO I