GOLD VALUATION
[To the Editor of the SPECTATOR.] •
SIR,---
" The strong doctrinism existing in England as regards the gold valuation is so blind that, when the time of depression sets in, there will be this special feature : the economical authorities of the country will refuse to listen to the cause here foreshadowed; every possible attempt will be made to prove that the decline of commerce is due to all sorts of causes and irreconcilable matters. The workman and his strikes will be the first convenient target ; then speculation and over-trading will have their turn. • Later on, when foreign nations, unable to pay in silver, have recourse to protection, when a number of other secondary causes develop themselves ; then many would-be wise men will have the opportunity of pointing to specific reasonewhich in their eyes account for the falling off in every branch of trade. Many other allegations will be made totally irrelevant to the real issue, but satisfactory to the moralizing tendency of financial writers. The great danger of the time will then be that, among all this confusion and strife, England's supremacy in com- merce and manufactures may go backwards to an extent which cannot be redressed, when the real cause becomes recognized, and the natural, remedy is applied."
I have taken the liberty of quoting this extract from a pamphlet on Money, by Lord Desborough, which I would advise everyone interested in the course of our economic distress to read carefully. The main interest of this extract lies in the fact that it was written by the late Mr. Ernest Sncyd in 1871—and we are now experiencing the first results of neglecting his warning.
We should, of course, remember that the respite earned during the 'nineties and early part of the twentieth century, was caused by the great gold discoveries in South Africa and Westralia, a respite which might have been longer but for -the artificial rise in the cost of gold production caused by labour conditions in the latter and the refusal to allow indentured Chinese labour in the former. This started prematurely a fall in commodity prices with the same symptoms that we arc suffering now some years before the War. The process was arrested and disturbed by the War, but we are now merely continuing it in accordance with Mr. Sneyd's prophecy. It is, of course, possible that further gold discoveries in West Africa, New Guinea and. Westralia may give us another respite in the shape of a short era of prosperity, but this is, of course, not the true solution, and unless as a corollary to the Ottawa Confer- ence unanimity is achieved in matters of Imperial currency allowing some other standard, preferably on symmetallio lines, to replace gold, we must of necessity fathom the full depths of the abyss as the Roman civilization did, and look forward to a renewed period of " Dark Ages "—I am, Sir, &c.,
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