5th February 1925.
From the point of view of industry, the main interest of a return to a gold standard is stability. In pre-war days the adoption of the gold standard by a country was an earnest that it was prepared to meet its international obligations, and so long as its obligations and currency were convertible to gold, traders all over the world could enter into contracts with it without any fear that the country in question would meet its obligations when they fell due. Since trade development generally depends largely on the use of credit, the underlying stability given to the national credits of all the countries of the world by adherence to the gold standard, enabled both long term and short term obligations to be entered into freely and so made possible rapid expansion of trade, which took place in the period immediately preceding the war.
If therefore we could feel sure that a return to a gold standard by this country would lead to a restoration in the immediate future of pre war conditions, then, in our opinion, this would be an over-riding argument in favour of such a return.
Unfortunately there is no guarantee; indeed, all signs point in the opposite direction, namely that a return to a gold standard by this country at the present time would secure an early return to pre war conditions.
In the first place, whereas before the war the World's supply was distributed among the reserves of the Banks in the different countries of the World in proportion to their means, at the present time the major