Full text: Referendum on the report of the Special Federal Reserve Committee

taken place hitherto has failed dismally, and if it continues to make so poor a showing 
* * * the day will indeed be brought much nearer on which an impatient and 
axasperated Europe will relegate the gold standard to the relics of a barbarous age.” 
Undoubtedly acting by reason of European interest, the Financial Committee of 
‘he League of Nations recommended last year that a special commission should be 
sonstituted to study the purchasing power of gold. This year it was decided the 
Financial Committee should proceed by having a subcommittee of its own members, 
supplemented by a number of financial experts, make the studies. The report of the 
Financial Committee respecting the subject, dated September 20, 1929, read: 
“This question of the purchasing power of gold is without any doubt a problem 
of the greatest importance. The fluctuations in the purchasing power of gold react on 
the level of prices and thus on the economic well-being of all countries of the world. 
Gold Inquiry 
“In certain circumstances, they may bring the most serious economic disturbances 
n their train. It is therefore fortunate that the League of Nations is examining the 
problem. It is indeed so vast, so complex and so fraught with difficulties that no nation 
alone could tackle it; only an international enquiry well prepared and methodically 
:arried out, such as the League of Nations is able to arrange. could contribute ma- 
rerially to the solution of the problem. 
“During the year under review, the enquiry has been started. In agreement with 
the Council, the Financial Committee has appointed a delegation from amongst its 
swn members, to which certain other experts of international authority have been 
added. The delegation is partly composed of persons who are; or recently have been, 
at the head of Central Banks, persons connected with other branches of finance, and 
certain economists known all over the world. Its terms of reference are: ‘to examine 
and report upon the causes of fluctuations in the purchasing power of gold and their 
offect on the economic life of the nations.” The delegation held its first preliminary 
meeting at Geneva during the last month, and on that occasion drew up a programme 
of work.” 
The London Statist’s comments at the time of the first meeting of this body will 
further illustrate the points of view reflected in the quotations made above from its 
pages, and were: “Recent developments in the sphere of international credit have 
made it appear increasingly evident that some intelligent approach to a problem of 
the future value of gold will have to be made soon if the gold standard is not to be dis- 
credited as an adequate basis of world credit and world prices. It is, therefore, wel- 
come news to hear that the special delegation set up by the Financial Committee of 
the League of Nations to look into this vast problem has held its first session. EE 
Their conclusions will almost certainly be based upon the contention that, unless there 
is some intelligent and coordinated effort on the part of the important central banks 
of the world to economize gold, the general level of world prices is almost bound to 
fall further during the next few decades. Gold economy has already made good 
progress insofar as gold is utilized for actual currency purposes. What remains to 
oe done now is to devise some means whereby gold can also be economized in respect 
to its utilization for the reserve requirements of central banks. * * 
"Continued on page 2N

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