London, March 26. With a view to
ameliorating the foreign exchange
position certain suggestions have re
cently been made to the effect that
gold ornaments in the hands of the
public should be mobilized. The pro
posal is an interesting one and some
of the points relating to it may be
usefully examined. The question can
be discussed under three headings
firstly, to what use would the gold be
put when obtained; secondly, would
its value be sufficient to serve any
really useful purpose; thirdly, what
incidental effects would be produced?
The desirability of reverting to a
free gold market in this country has
often been advocated, but stress has
been laid on the fact that it is im
possible at present to give effect, tc
this suggestion, because at the mo
ment such a course would cause our
gold reserves to be depleted owing to
our inability to draw gold from those
countries with whom we have a fa
vorable balance of trade. The fact
that our net balance of trade was fa
vorable would be insufficient to main
tain our gohi stocks, and until Europe
returns to some form of financial
equilibrium, and until the process of p
reconstruction and reorganization
has been accomplished, there seems t
little hope of London again becoming
a free gold market.
