THE GOLD STANDARD
[To the Editor of the SPECTATOR.] SIR,—Mr. D. M. Mason's letter, in the Spectator of January
3rd, on " Banking Credit " is an illustration of the total blindness of many of our public men regarding the results '
of a currency based on gold. It has been demonstrated over and over again in the history of this and other countries'. that the gold basis is a very unstable one, and has been the frequent cause of panics, which have only been relieved by its suspension !
In pre-War days the gold standard together with our so-called " free " gold market gave us the most variable Bank Rate in the world. It also penalized borrowers every time there was a demand for gold abroad, through the increase of the Bank Rate. It has been estimated that the advance of 1 per cent, in the Bank Rate costs this country £250,000 per week !
Considering that at present the bulk of the world's gold supplies are controlled by the American bankers, it is quite evident, as Mr. Darling intimates, that a reversion to the gold standard will mean our being controlled by the Wall Street financiers. It also means that this country will have to bear the burden of maintaining the price of gold at a minimum of £3 17s. lOid. per ounce ! All' this is a terrible menace to the trade and industries of this country. There is also the question of the increase of our War debts, which —through this policy of raising the value of the £ sterling —have been doubled during the past four years ! To call this a " sound " system is a contradiction in terms.
It means inevitable bankruptcy and ruin for thousands in this country, and the only people who gain are those who have fixed incomes and live on interest charges, together with those who deal in money and credit—i.e., less than 5 per cent. of the population. The currency contraction policy pursued for the past four years for the purpose of re-establishing this suicidal system has already cost the merchants, manufacturers, agriculturists and wealth producers generally several thousands of millions of pounds. ' It 'has - reduced the national income an average of fully £1,500,000,000 per annum since 1920 1 The gold standard is a cunningly devised system for enslaving nations by creating inextinguishable debts. It makes the creation of debts extremely easy, but renders their settlement impossible ! It is the parent of usury which has been denounced as both ruinous and immoral by every great moral and religious teacher from Moses to John Ruskin:—
I am, Sir, &c., ARTHUR KITSON. 12 St; James's Square, S.W. 1.
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