Abstract
IN a recent publication (“‘Standard Gold’ and Silver: the Way out of the Crisis”. Pp. 88. Manchester: Taylor Garnett Evans and Co., Ltd., 1932), Dr. Ernest Zucker advocates the devaluation of the world s gold currencies by means of a onethird reduction in the gold content of the standard coins. He also advocates the introduction of silver as a subsidiary currency to facilitate trade with the silver-using East. The effect of the first proposal, he argues, would be to raise the prices of raw materials and similar commodities by about half, since their prices are world prices based on gold. The purchasing power of wages and salaries, on the other hand, would be reduced by about a third. In this way the disequilibrium between the prices of raw materials and manufactured products could be removed, while inter-allied debts and reparations would be reduced by a third. Dr. Zucker's scheme, however, presents serious difficulties. First there is the practical problem of securing common action among creditor nations, especially the United States and France. Secondly, devaluation would not in itself re-adjust the maldistribution of gold. Creditor countries would continue to attract the world s gold and if they persisted in high tariff policies, it would still be difficult for debtor countries to make payments, or for the volume of world trade to be increased.
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Gold and Silver Currencies. Nature 131, 198 (1933). https://doi.org/10.1038/131198a0
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DOI: https://doi.org/10.1038/131198a0