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Show FRANCE GOES OFF GOLD STANDARD STANDARDAmericanAngloFrench . American-Anglo-French American Anglo French AJnerican-Anglo-French AJnerican - - Agreement Agreenlent Attempts Attelnpts Stabilization ; See SeeFreer SeeFreer SeeFreer Freer Trade Prospects ; Dictatorships Still Are Holding Out . By WILLIAM C . UTLEYF UTLEYOR UTLEY UTLEY@OR OR three } ) , ears cars the bugaboo ofan of an me\ me ineti ine\itable ine itable meItable \ Itable stable jump off the thegold thegold thegold @OR FOR F @ gold standard kept successive administrations admulIstratIons of the FI Frenchgovernment Fiench French Fienchgovernment ench enchgovernment government in 111 various states ofchronIc of chronic jitters litters But eco eco- economIC eco- eco economic economic - - Jumphas nomic forces were no longer to be denied , and andat at last the jump has been made , the tile franc devaluedand devalued and the responsibility responslblhty laIdIn laid In Inthe inthe inthe the lap of Premier Blum and his "Popular Popular " Front " governmentFrance governmentFrance government governmentFrance France is the last nation to leave the gold standard . Tradi Tradi- Traditions Traditions Traditions - - tions that have been built up over a century or more have been beencontradicted beencontradicted beencontradicted contradicted contradictedwithIn within a few years . There is now no country on onearth onearth onearth earth whichwill which willechange will exchange echange " ( gold for paper money for the askmr- askmr askIng . - When the movement first started startedit it was an almost universal feelmg feeling feelmgthat feelingthat feelingthat that the gold standard symbolized symbolizedsafety symbolizedsafety symbolizedsafety safety and security , that it was wasnecessary wasnecessary wasnecessary necessary to stabilize world trade tradeWorld tradeWorld tradeWorld World wide were the remors of fear fearfive fearfive fearfive five years ago when Great Britam Britain Britamleft Britainleft Britainleft left gold In the following followmg crisis crlSIS our ourown ourown ourown own banking structure expenenced experienced experiencedthe expenencedthe the famous holiday 'holiday * ' ' " . and more morethat morethat morethat that 40 cents was taken out of our ourdollar ourdollar ourdollar dollar . When Britain Bntam went off oft the gold goldstandard goldstandard goldstandard standard in 111 1931 our stock market marketbecame marketbecame marketbecame became panicky . Now in m 1936 as asFranceand asFranceand asFrance France-and France and - - and with her Holland and andSWItzerlandgoes andSwitzerlandgoes andSwitzerland SWItzerland-goes SWItzerland goes - goes oft ofI off it it , , the news newsis newsis newsis is actually a stimulant to prices on onthe onthe onthe the Exchange . Origination of Gold Standard . The gold standard , which disap dIsap- dIsappeared disappeared disappeared - peared in so short a tune tunc time , was wasfostered wasfostered wasfostered fostered and promoted in G Great GreatM rea r e a t t3wk 3wk d v 4e ? c ) a aFrv9N Frv9N ( S S S.vgy . .vgy/ .vgy .vgyJ .vgya { / % a pY J c \ fga Y k t tr " ? /r r / Sh ' f ff f Y'd Yd ' ' - . KL KLf f as o 'Q Q ' SS i - , / a af f l lf f J JY . , ? e Y ' Y P Y r : ( aD1"y aD1y aD1"yf aD1"yN aD1"yw aD1"yX " f N w X ; f fA fM A \ M 1\1 1 . . Vincent Vmcent Auriol , French Min Mm- Mm Mmtster Mmtster Minister - ister tster of Finance Fmance , Announced France FranceIs Is Deserting : the Gold Standard . Britain smce since the end of the Napole Napole- Napoleomc Napoleomc Napoleonic - - onic omc wars During Durmg the period from fromthat fromthat fromthat that time tune until the beginning begmmng of the theWorld theWorld theWorld World war , England became the theworld's theworld's theworld's theworlds world's worlds ' leading leadmg figure in commerce commerceand commerceand commerceand and finance , and her prosperity was wasa wasa wasa a standard tor for comparison It be- be became became be became - came the popular belief this pros pros- prosperIty prosperity prosperity - perity was due in m large measure measureto measureto measureto to England's Englands ' steady retention retenbon of the thegold thegold thegold gold standard . By the early part partof partof partof of the present century nearly every everyimportant everyimportant everyimportant important nation in m the.orld the \ world \.orld .orld . had hadfollowed hadfollowed hadfollowed followed England's Englands ' lead by settmg setting settmgup settingup settmgup up a currency which was at any anytIme anytime anytime tIme convertible into mto the precIOus precIOusmetal preciousmetaL preciousmetaL preciousmetaLIt metal metaLIt It gave a man a sense of securIty securityof , of course , to know that at any tune time tunehe timehe tunehe he couldalk could \ walk \/alk alk / into a bank WIth WIthpaper withpaper withpaper paper money and exchange it for forslmy forsiimy forshiny slmy siimy } gold . The importance of thIS thIStradItIon thistradition thistradition tradItIon by the time of the World Worldwar Worldwar Worldv/ar Worldv ar war / had been multiplied mulbpl1ed with the thepassmg thepassing thepassing passmg passing decades , . Today , it is hard hardto hardto hardto to convince millions of French farm farm- farmers farmers farmers - ers and \ workers corkers orkers and their families familiesthat familiesthat familiesthat that shattering shattermg the tradIbon111 tradition tradIbon \ will \\111 111 not notbrmg notbring notbring brmg bring panic . . That is why the Blum Blumgovernment Blumgovernment Blumgovernment government needed plenty of cour cour- courage courage cour- cour courage - - age to forsake gold at a time hke like hkethe likethe likethe the present v/hen v hen when / the nation fiutters flutters flutterson fiutterson on the verge of commurusmWhen communismWhen communism commurusm communismWhen When the World war started , Eu Eu- European European European - ropean nations soon found it neces neces- necessary necessary necessary - - sary to use their gold reser\es reser es reserves resen \ E'S ES ' for forthe forthe forthe the purchase of munitions and other otherwar otherwar otherwar war materials They began borrow borrow- burrow- burrow borrowmg burrowing borrowing - ing mg large amounts and IncreaSIng IncreaSIngthe increasingthe increasingthe the volume of their currencies currenCIPS nnd and nndcredIt andcredit andcredit credIt Their gold reserves could couldnot couldnot couldnot not sustain such measures and the thegold thegold thegold gold standard disappeared . In the inflation which followed the thewar thewar thev/ar thev ar war / the franc dropped to one fifth fifthlts fifthits fifthits lts its former value , . the German mark markbecame markbecame markbecame became becameIthOUt \ without \\IthOUt IthOUt any nny value what what- whatever whatever whatever - ever , and Belgium and Italian ItaHan cur cur- currenCIes currencies currencies - rencies suffered sufIered sun similarly arly . Even Eventhe Eventhe Eventhe the almighty pound sterling wav wav- waver wavergd wavered - ered ergd er d in value . The popular opinion opinlon m in political politicaland politicaland politicaland and economic circles after the war warwas warwas warwas was that chaotic chlotIc : conditions could couldbe couldbe couldbe be cured if the gold standard could couldonce couldonce couldonce once more be restored . Japan Last to Stabilize . I IJapan Great Britain was the first to re- re return return re return - - turn , after a long , hard pull ; in in1925 1925 she set the pound sterling once oncemore oncemore oncemore more at its old gold parity of 4.86 486 . 4.88.Inflation 488.Inflation 488Inflation . . . Inflation had periled France , but butshe butshe butehe she succeeded m 111 in returning returnmg to the thegold thegold thegold gold standard with her franc worth worthtwenty worthtwenty worthtwenty twenty per cent of its former value valueof valueof valueof of 19 193 3 cents in 1928 Japan , . the thefollowing thefollowing thefollowing following year , was the last of the thebig thebig thebig big nations which bad had been in the thewar thewar thewar war to stabilize . The gold standard which followed followedthe followedthe tollov/edthe tollov edthe / the war , however , was short lIved lIvedBy livedBy livedBy By the time tune Japan had accepted It it it.the itthe , . , the depression had already begun begun.And begunAnd . . And it soon became apparent that thatUIC thatthe thatthe UIC the new gold standard was no pan pan- panacea panacea panacea - acea tor for the world sills s ills . The storm clouds broke over Eu- Eu Europe Europe Eu Europe - rope m in May of 1931 . The KredIt- KredIt KredItAnstalt KreditAnstalt Kredit-Anstalt Kredit Anstalt - - Anstalt , . , Austria's Austrias ' largest prIvate prIvatebank privatebank privatebank bank , tailed failed . . AU All Europe beg b beganscurrying e g a n nscurrying nscurrying scurrying tor for economic cover , wIth withdisasterous with1 ! disasterous results Immediately L Germany was besieged by Ameri Ameri- American American American - can and other foreign creditors In Ina Ina Ina a few short months her reserves reservesdwmdled reservesdwindled reservesdwindled dwmdled dwindled to a state v.hieh vhieh which . hich compelled compelledher compelledher compelledher her so suspend payments upon her hershort hershort hershort short term debtU debtU debt debtV V U . S . Leap Lca\es Lca es Lea\es Lea \ es Gold . In Great Britain , the banks had hadtaken hadtaken hadtaken taken most of the world's worlds ' shortterm short- short shortterm short-term short term - term deposits . It had lent a large largeshare largeshare : . share o of ( them out m in long term to toGermany toGermany Germany . In the crisis , BrItam Britain BrItamfound Britainfound Britainfound found an international mternahonal bank run sud sud- suddenly sud- sud suddenly suddenly - - denly on her hands In September Septemberof of 1931 the Bank of England was wasforced wasforced wasforced forced to suspend payment in goldOther goldOther gold goldOther Other nations nahons had little choice m in mthe inthe mthe the matter , but were compelled to tofoUow tofollow tofollow foUow follow Britain ofl of off ! the gold standard standardsuspending , suspendmg suspending their own gold pay pay- payments payments payments - ments mentsThus Thus over the world there was wasset wasset wasset set up a chain cham of nations bound to toGreat toGreat toGroat Great Britain Britam by links of currency currencyand currencyand currencyand and creidit creIdlt Countries Countrieshich CountrIes.hIch \\hich hich \.hIch .hIch which \ \ . re remamed remained remamed mamed mained on the gold standard un- un unmedIately unmediately im immediately - mediately found themselves at a adIsadvantage adisadvantage adisadvantage dIsadvantage with the group led by byBritain byBritain 'I I by'I 'IBntam ' Bntam Britain Prices went down m in the thegold thegold . gold countries France and other othernatIons othernations othernations natIons with short term balances In Inthe inthe mthe the United States began ta taking mg thclr their thclrgold theirgold theirgold gold out of this country . Withdraw WIthdraw- WIthdrawals Withdrawals Withdrawals - als of gold worried American bankswhich banks , whIch were also hurt by the fallmg falling fallmgprIces fallingprices fallingprices prIces of commodities and securi securi- securitIes securities securities - - ties Public confidence m in the banks bankswas bankswas bankswas was at the lowest point pomt in many manyyears manyyears manyyears years The bank ' holiday " ronowed followed ronowedThen followedThen followedThen Then this nation decided to leave leavethe leavethe leavethe the gold standard , as about three threedozen threedozen threedozen dozen other nations had before ItThe itThe it itThe The only nations remaining remammg on onthe onthe onthe the gold standard at that time bme were wereFrance wereFrance wereFrance France , . Belgium Belgmm , the Netherlands Netherlandsand Netherlandsand Netherlandsand and Switzerland Belgmmas Belgium Belgmm vas \\as as was \ , the thenext thenext thenext next to give m In She came into too toomuch toomuch toomuch much competition with Great BrIt- BrIt BrItam Britam Brit-am Brit am - - am m in the world s commerce On OnAprIl OnApril OnApril AprIl 1 I , 1935 , . she devalued her cur cur- currency currency . - rency . , Germany , Italy Hold Dold Out Out.Gold OutGold . Gold was not leaving leavrng the Bank Bankof Bankof Bankof of France daily dally m in wholesale quanti quanti- quantitIes quantities quantities - ties Although it was apparent that thatdevaluabon thatdevaluation thatdevaluation devaluabon devaluation of ot the franc could al- al allevIate alleviate al alleviate - - leviate France's Frances ' plight phght , , , the act was wasabhorrent wasabhorrent wasabhorrent abhorrent to the people Cabmets Cabinets Cabmetswere Cabinetswere Cabinetswere were elected on the strength of theIr theIrvaws theirvows theirvows vaws vows to defend the franc Devalua Devalua- Devaluabon Devaluation Devaluation - - tion bon was finally accomplished accomphshed over a alarge alarge alarge large dissenting dlssentmg vote m In the senate senateas senateas as well weU as in 1D the chamber of depu , tics ties ' The 'l11e l11e tact fact that it 1t was put over overby overby overby by the "People's Peoples " ' Front " . may cause causea a split between the socialists and andthe andthe andthe the communists in m the Blum party party.Labor partyLabor . Labor is a little disgruntled , . any any- anyway anyway anyway - way , because Blum has not , m in a atew afew afew tew few months , been able to bring brmg the thecountry thecountry thecountry country the prosperity which wluch , it is isnow Isnow isnow now evident , , was expected to come comevirtually comevirtually comevirtually virtually ovemieht overnight when the Laval Lavalgovernment Lavalgovernment Lavalgovernment government was turned out . Germany nnd and Italy alone among amongthe amongthe amongthe the major powers have not formally formallyannounced formallyannounced formallyannounced announced devaluation ; neverthe neverthe- nevertheless nevertheless nevertheless - - less , they have , in reality reahty , curren curren- currencies currencies - ' cies which are largely artificial arbficlal arbficlalItnly artificiaLItaly . Italy Itnly , if she would join the pound- pound pounddollar pounddollar pound-dollar pound dollar - dollar franc bloc , will have to as- as assume assume as assume - sume obligations obItgations of striving for forgreater forgreater forgreater greater liberality in world trade and andthe andthe andthe the alleviation of monetary limitations limita limita- limitation limitations - tion tions that hamper world trade . , This ThisbrIngs Thisbrings Thisbrings brIngs Benito Mussolml Mussolmi Mussolini face to face facewIth facewith facewith wIth a difficult decision , tor for it would mean the repudiation of ot the pohcy policy pohcyof policyof policyof of economic independence he has hasfostered hasfostered hasfostered hasfosteredThe fostered fosteredThe The agreement bet b between e t wee w c e nth n t theUnited h e eUnited eUnited United States , , Great Groat Britain Bntam and andFrance andFrance andFrance France , although it docs does not qUIte qUItecome quitecome quitecome come up to actual stabilization stablhzatIon , , IS ISseen isseen isseen seen abroad as something somethmg of a abrIght abright abright brIght sport in the dark sky WhICh WhIChovercasts whichovercasts whichovercasts overcasts fear tear ridden Europe today today.It todayIt . . It is thought that the agreement agreementwIll agreementwill agreementwill wIll preclude any competitive cur- cur currency cur currency - . rency debasement , , , and will lead to toa toa toa a more co |