GOLD STANDARD CURRENCY

Daily Telegraph (Napier), Volume 59, Issue 35, 13 March 1930, Page 13

GOLD STANDARD CURRENCY

STJSP'ENSION BY ARGENTINA. DISTURBANCE OF COMMERCE. The suspension of the gold standard in Argentina, by the ciosing of the gold convensioii office at Buenos Aires in December, was mentioned by Mr AM. Mitohison in his address at the annual meeting of the NeV Zealand and. River Plate Land Mortgage Company, as the most disquieting event that had occurred. during tbe period under review. "While this office was open, the Argentine currency was on. a gold basis, and the Argentine exchange could only fluctuate ( within narrow limits rotmd the par value of 47.577d to the peso, but with the office closed we are again in the position in which we were prior to August, 1927, when ' the office was reopened for the first time after the war," saidMr Mitchison. "When I had the pleasure in Jannary, 1928, of speaking to you of the confidence and stability which a gold basis, engenders, I spoke in the hope and belief that those who regulate the credit and currency of the great country in which we operate would pursue those lines which are necessary to prevent too, great expansion, for when credit and currency are unduly distended a drain of gold inevitably follows. "Unfortunately this has not been done, and the export of gold became so serious that it was deemed necessary to stop it hy the ciosing of the conversion office last month. This was at once reflected in the exchange, but remedial measures of a temporary nature were put into force, which have kept the exchange up to its present figure, and it is to be hoped that before long other influences of a more permanent character will come into being which will hring the exchange back to par, and enable the conversion office to he reopened. "I need not dwell on the importance of. adherence togtlie gold standard," Mr Mitchison Uadded. "Apart from other reasons it is impossihle for those engaged in business to exercise the necessary foresight which a gold based currency permits unless the link is maintained, and consequently wbenever this is_ hroken, the progress of the country is impeded and its growth 's checked."