Letters to the Editor
[In view of the length of many of the letters which we receive, we would remind correspondents that we often cannot give space for long letters and that short ones are generally read with more attention. The length which we consider most suitable is about that of one of our paragraphs on " News of the Week."—Ed. SPECTATOR.]
A FUTURE CURRENCY STANDARD
[To the Editor of the SPECTATOR.]
Sin,—Among the various factors contributing to the present disastrous world situation the most potent and immediate cause of our difficulties is the maldistribution of gold. To counter this an association has been formed to press for the remonetization of silver, which, by increasing the basis of all currencies and by restoring the purchasing power of the silver-using East, should prove a great and constructive step towards the desired economic revival.
At the same time it must not be assumed that silver will be a panacea for all our ills, for so long as great exporting and creditor nations will neither import nor lend abroad, there must be a drain of metal, and just as gold has flowed under a gold standard so would gold and silver under a bimetallic system. Surely, therefore, if the whole currency question is to be reopened an attempt should be made to link the standard of value to commodity prices rather than to gold or even gold and silver. This could be done if there were established machinery for arriving at an international commodity index number and if, according to fluctuations in this number the Central Banks raised or lowered their buying price of gold or silver.
Thus, if there were a fall in commodity prices, a rise in the Banks' buying prices would tend to restore the fall and world currencies would be more nearly aligned to the average price of commodities. In other words their real commodity value and not their metallic value would tend to remain stable.
Otherwise the world will always be at the mercy of fluctua- tions in the production of the metals and of the policies of great creditor nations such as France and the U.S.A.—I am,
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