A Regulated Gold Standard

“A Regulated Gold Standard.” The Economist (May 11, 1935).


“It is still impossible to predict when conditions will make a solution of international currency problems appear practicable. This does not mean that it is too early to ask what sort of system we really want, and we can begin to survey the practical possibilities of a permanent reorganization, even if the actual decision should only have to be made at a fairly distant date.

The case against the gold standard, in the form in which that case is now most popular, is based on two separate counts. One is directed not against gold in particular, but against any kind of international standard. It is hoped to protect the economic system of any country against all disturbances originating abroad by cutting loose the rigid connection between the national current sea and those of other countries which a fixed parity provides. It would make little difference whether this was done by remaining on independent paper standard, or by ostensibly adopting a gold standard but with a proviso for variable parities worldwide gold points within which considerable fluctuations will be possible, or by any similar device. In all these cases no, and international standards would really exist.

This part of the anti-gold arguments must, I think, be on reserve leave rejected as equally wrong on theoretical and practical grounds.”

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