1937-07-12 — Page 18

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THE HONGKONO TE LEGRAPH, MONDAY, JULY 12, 19 87.

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Hongkong Telegraph.

MONDAY, JULY 12, 1937.

AIR MAIL AT ORDINARY RATES

WH

Professor GUSTAV CASSEL, considered the world's greatest authority on gold, says

The Price of GOLD Should

be

Cut

'HEN President Roosevelt, in January 1934 raised the price of gold in terms of dollars by about 70 per cent, he took a step with extremely far-reaching consequences, both for the world's monetary system and for its economy at large.

There was no adequate penetration of the problem, and power took the place where insight should have directed.

The seed now begins to ripen into a crop of formidable troubles.

The authorities are unable to indicate a clear course out of the difficulties, and the world at large trembles in fear of what is going to happen.

AL

Professor Gustav Cassel, of Stockholm University, was the Swedish Delegate to the World Monetary and Econo- mic Conference in London in 1933. He has written many authoritative works economics and world monetary problems.

on

minimum reached before the abandonment of the standard.

gold

Inflation of such a magnitude

is certainly not a thing to play The increase in the price of

At such a price level the entire with. It is natural, then that an gold immediately converted the

gold funds accumulated would be escape should be sought from former searcity of the metal into

such consequences. This is pos- required, or thought to be re-sible only if the authorities ja great super-abundance. The

quired, as a basis for the supply of gold for monetary

choose to reduce their buying necessary supply of means of purposes was further swollen by

payment. Whether under such price for goll. It would not be Early next year, Hongkong the enormously increased pro-

conditions a new equilibrium necessary to go back to the old will be brought into the all-duction of gold and by exports

could be established is uncertain, price; a price somewhere half- of Indian hoards, Empire air mail service scheme

for burying gold in their cellars, but at any rate gold would again way between the old and the new by which all first-class mail Rising Commoditics

President Roosevelt has in these possess a certain scarcity, which would probably be preferable. days met such doubts with a de- is an indispensable condition for Restrict Production

that he will the stability of any (that is, letters and postcards) THIS mighty gold stream press. finite ass bra col

gold will be carried without sur- ed with almost geological continue his gold-buying policy. standard system.

IT would serve to restrict gold a rise in com-

Assuming that this is going So long as large unused re- force towards

production to more manage- [charge. In other words, air

to happen, aml modity prices-indeed, such

assuming also serves of gold exist that may able dimensions, and at the same mail postage from here to any rise was originally aimed at, that the British authorities will be put in motion at any time, time it would reduce the cost of moderate follow the same line, the United there can be reliable guarantee acquiring the gold that still part of the Empire will be at the although only to

States and Great Britain should for a stable purchasing power of might be offered. A sufficient ordinary rates which at present extent.

have to share between them the the currency.

lowering of the price of gold Japply to mail sent by sea. Com-

The limit that could be re- burden of buying up all gold that

would also make it possible for garded as desirable was reached pared with existing conditions about the middle of last year, least, by far the larger part of

be forthcoming, or at Serious Drawbacks

the authorities to ccase public this will mean a great saving in Until then the rise in prices had it. The financial sacrifices of HOWEVER, A development hoarding of gold, and let all gold time, at no extra cost, a saving been somewhat retarded by a such a policy would, doubtless, leading up to such a rise in offered be effectively used as a great increase in the production in the long run be felt to be commodity prices can hardly be basis for the monetary system, which will be even more marked of all sorts of commodities. but intolerable. Governments con- looked upon with equanimity, so that no further cost for when faster planes are put on when the scarcity of the means tinually working with under True, Governments would tem- sterilising would come in ques- the Empire routes. The new of production began to make halanced Budgets, and in urgent porarily be relieved of some of tion.

itself felt a further and sharper need of funds, would sooner or their most immediate financial The supposed reduction of scheme will apply as from the rise in prices was inevitable. As lufer be forced to find some use embarrassments, but the draw- end of this year to all mail be- this rise took place at a time for their immense treasures of backs of tween England, South Africa, when depression had already gold.

turned into distinct prosperity, India, Burma, Malaya, and it assumed a clear character of Further Inflation other centres,

and will be inflation and could not but evole serious anxiety. extended later to Australia as well. It embodies

may

Buch a development the price of gold would, however, necessitate a considerable writ- would be very serious.

the gold funds. The lowering of the pur- ing down of chasing power of money would adready accumulated, and mone of tary authorities would have to reduce incomes severely MONETARY orthodoxy would large classes of the population; face a great financial loss. This have no reason to object to very rise of prices would in- may be a reason for their hesi tance. It should, however, be Being aware of the dangers of agree.]. an

॥ superfluous gold supply, an enlarged supply of means of cluding all forms of old-age pen- |ment between the Air Ministry, monetary authorities both in payment, "backed" by so abun- sions, would lose a substantial remembered that this loss grows Further part of its value; in addition, the rapidly every month the measure the Post Office and Imperial Air- England and the United States dant, gold reserves,

then be un- very rise of prices would in- is postponed.

Naturally, the gold-producing ways for

a period of fifteen have taken measures to diminish inflation would

Commodity prices evitably cause far reaching dia- the active influence of gold on avoidable. years, during which time sub-the supply of means of payment, would presumably rise to a level turbances in the conduct of interest, which has acquired the position of a world power, would sidies totalling £9,000,000 will be Such measures may be des- some 70 per cent. above the business.

have to suffer from the lowering of the price of its product. The paid. It is expected that about cribed, in short, as a "sterilising"

the gold acquired.

resistance from this side may prove strong enough to delay action.

FIRST SHIPMENT and the Straits Settlements, with

OF THE

NEW FORD '10

DE LUXE 4-DOOR SALOONS NEXT SHIPMENT ARRIVING SOON

COUNT

THE

"TELEGRAPHS."

EVERYWHERE

a

of

Buried In Cellars

an

I

THE

NIGHT HUNTER

.

•

опе

an

ow)

curtailment of that country's

The a hundred thousand letters per principal means for this purpose year will be carried during the is that the central institution first years of the service.it may be a bank or a 'system

Treasury, or of banks, & There will be nine services 8 Exchange Equalisation Fund-

been pro- stery at the gloaming hour in listen while on the wing, a great | week to and from Egypt, five buys all gold offered and puts it I FIND there is magic and my absence of sound-the bird can Divergent Interests

posed in an international week to and from India, three away in its vaults. This may the woods, as the moon rises over benefit to a nocturnal raider. The AN alternative has

seem an effective means of rom-the tree tops and lights up the owl's hearing is exceedingly acute,

Nature agreement for restriction of gold week to and from East Africa bating inflation, but when the gindes with a soft, amber light.not a sound escapes it.

offerings of gold on the London The soft breeze scema to whisper has formed its cars for every nd-production. Such a proposal is,. market run up to several millions it treads its way, waving the vantage, to hear sounds from above however, both impracticable and irrational. It has become more eventual extension to Hongkong, pounds a day the method begins censers of the summer's fragrance. as well as below,

Reclining on a fallen tree trunk, Equipped as it is, cannot impracticable since gold produc- and two a week to and from to be a bit expensive.

I hear the trailing garments of the wonder at the owl's success 8 ation has been extended to so South Africa and

wood's myrlad atirring night life. night hunter. Killing rats, frogs, Australia.

listen to the night singers. The mice, and voles, truly he is the many different countries with the most divergent economie Both landplanes and flying-boats

interests. For instance, nobody belleves that it would be pos- will be employed on these ser-IT is only natural that people sedge-warbler is trilling in a duct fricad of the farmer, ask themselves how long can with the black-cap.

Silent as floating thistledown, the Several years ago, while ramblsible to come to an agreement. vices, which will operate from the authorities go

on spending England. Extended night millions in this way-for no tawny owl winnowed his waying through a field, I saw flying will ultimately bring productive purpose, but simply through the wood, settling softly blinking at the foot of a hedge in with Russia, involving a severe

upon a nearby gate bordering the garish light of day.

atrice he precipitous glen. In

I paused to admire his tawny production of gold. The pro- Sydney in Australia within seven days of London, Cape-about 200 miles per hour. It is flies off, as if secuting my lurking brown plumage, and his wise proposal is also irrational. It can Now he "Hoo, ho fessor-like face. It seemed like hardly be common sense first to town and Singapore within 100 stipulated that they shall be re hoos" with terrific voice from the one who had been out on the tiles raise the price of gold 70 per all night. So I thought, "My man, cent. above the old price and The peculiarity of this owl is its ' get you now.". Immediately then try to correct the bad con- hours of London, and Karachi placed within seven years by new far end of the wood.

machines embodying "all modern and Kisumu within 60 hours,

in aeronautical habit of hooting when it launches grasped it it gave a terrible cry, improvement

itself upon its prey, and repeating badly Incerating my arma.with its sequences by preventing that but until the routes are fully technique and construction exist the cry with greater force when it claws. I took off my coat and increase of production which is equipped with night flying fact-ing at the date of replacement." has seized its victim. It carries te enveloped the savage, which I called forth by the higher price. Thus the discussion is going Ilties and further experience has It will thus be seen that every prize to its perch, where it creons carried in triumph to an adjacent farm. When the good farmer be- held me coming into his steading, on without any decision being been gained, it is proposed

to care is being taken not only to over it ere devouring it. on a sound

As I waited he came over the with blood-covered face and hands, arrived at. observe the following schedule: start the services

Meantime the world's economy (Sydney in ten days. Capetown basis, but to make provision for high beech hedgo with a full-grown he was quite apprehensive, till I

# inrgo is held up in the most painful their future expansion and de-rat in his claws Straight to Iria unravelled the cause of the trouble. and Singapore in six to seven

uncertainty about the funda- velopment. In this way the perch he headed, Alling the wood Safe in the seclusion of

with his cry. From afar his mate barn we left him.

The owl became the farmer's mental conditions for its work- days, Hongkong in seven to eight various parts of the Empire will answered, and the two joined up |days, and Karachi and Kisumu become knit closer together, and for supper. An idyll of the woods! pet, ridding the barn of its plague ing, and revolutionary agitators

Much has been said about the of rate and mice.. Whort food got in three to four days. The craft the exile in Ilongkong will feel

nolacicss-flight of the owl, which scarce he disappeared to resume his are preaching with increasing success the "incapacity of the employed will be all-British and that he is in more living touch allows it to drop in silence on its beneficent work elsewhere.

capitallet system." In the

J. Turnbull Aliken will have a maximum speed of with the people of the Homeland, pray. More important.

presence.

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