D'Abernon On Gold

Gold may well be Question of the Year in 1931. What heads of central banks all over the world are going to do about gold is just now their closest secret, the subject of earnest, secret conferences (TIME, Dec. 1 & Dec. 15).

Last week England's noted elder economist Viscount d'Abernon of Stoke d'Abernon, who was her Ambassador to Germany directly after the War, spoke up, as more active financiers cannot very well do. Said he: "This depression is the stupidest and most gratuitous in history!" All the existing essential circumstances "except monetary wisdom," he declared, favor a return to prosperity and well being. Gold is the thing about which 1930 was stupid, about which 1931 must be wise. "The explanation of our anomalous situation," declared Lord d'Abernon, "is that the machinery for handling and distributing the product of labor has proved inadequate. The means of payment provided by currency and credit have fallen so short of the amount required by increased production that a general fall in prices has ensued. "This has not only caused a disturbance in the relations between buyer and seller, but has gravely aggravated the situation between debtor and creditor. The gold standard, which was adopted with a view to obtaining stability of price, has failed in its main function. In the meantime people wrangle about fiscal remedies and similar devices of secondary importance, neglecting the essential question of stability in standard of value." Most startling, provokingly cryptic was Lord d'Abernon's conclusion: "The situation could be remedied within a month by joint action of the principal gold-using countries through the taking of necessary steps by the central banks." This amounted to saying that if things do not look up within 30 days five men will be largely to blame: Governor Montagu Collet Norman of the Bank of England. Governor Eugene Meyer of the Federal Reserve Board (U. S.). Governor Clement Moret of the Bank of France.

Governor Bonaldo Stringher of the Bank of Italy. Governor Hisaakira Hijikata of the Bank of Japan.

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