Orders of the Day — Gold Standard Bill.

Part of the debate – in the House of Commons at on 4 May 1925.

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Photo of Mr John Jones Mr John Jones , West Ham Silvertown

It is with a certain amount of trepidation that I have to offer a few remarks on this subject. MY knowledge of gold is very limited. Consequently I have to apologise for my ignorance. I have listened to some of the speeches which have been delivered with the object of showing that a return to the gold standard is supposed to be, in the direction of relieving unemployment in this country, and restoring the ecoomic prosperity of Europe. If I understand the argument, it amounts to this, that, almost automatically with the restoration of the gold standard, we shall have our people who are now out of employment getting an opportunity of resuming employment. Might I remind hon. Members who have dived into history that the historical parallel is not quite correct. At the time of the Napoleonic Wars, England was the workshop of the world. Practically speaking, we had a monopoly of the export trade of Europe, and to a large extent we were the masters of our own destinies in the production of goods, because, after all, all trade is the exchange of goods for goods. It is not a mere matter of juggling with currency, and when you have established your gold standard and other countries have got paper standards or silver standards you will find that the relative position, so far as the cost of production is concerned, will not be varied by the mere declaration of a gold standard.

How are the Germans and the Belgians able to compete with us? How are the iron ore mines of Alsace-Lorraine able practically to put you out of most of your European markets to-day? Is it because their credit is greater than yours or because of any standard of currency? No, it is because owing to the depreciated currency they are able to compete against us, and the people have got to work longer hours for lower wages. So far as the gold standard is concerned it does not help us there. What we are face to face with now is not the breakdown of the currency system, but the breakdown of the industrial system which is happening now in every country in the world. The people who used to be your customers have now become your competitors. By means of cheap labour and other conditions they are to-day masters of their own destinies in that particular respect.

The argument has been advanced that we are the largest suppliers of gold to the world, and naturally we want to monopolise that power. If gold is going to talk, as they say money talks, we would like by our gold to talk to the rest of the world, but other countries, if they have not got control of the gold supply, are going to adopt other alternative methods to protect their own economic and financial interests. I am no believer, and I am sorry that anyone should believe, in the theory that a mere juggling with the currency is going to solve the economic or industrial problems with which we are faced. The only way of solving these problems is by an organisation of all resources, industrial and otherwise, for the purpose of supplying the needs of the people on the basis of use and not of profit. Of course, profit comes first in this House, rent comes next and interest next—a kind of blessed Trinity, the Father, Son and Holy Ghost —but some of us on these benches know that the mere return to the gold standard will not do anything like what has been suggested. The collapse of the present system of industry is inevitable. Every year brings it nearer, because the countries of the world are becoming more self-supporting and more self-contained than they were. You talk about restoring the export trade, but you will not be able to restore it by mere talk of gold fine or superfine or paper notes.

The workers of the world are not getting enough to buy back the goods that they produce. That is the secret of industrial depression. Seventy-five per cent. of the population of Great Britain are not getting back enough in wages to enable them to buy the goods that they make. The result is inevitable glut. Other countries protect themselves against you by not allowing your goods to enter. Their people are not able to buy back the goods that they produce. So we have the inevitable international crisis. About 20 years ago such a crisis came about once in every seven years. Now it comes about once in every five years. Even the United States, with all its gold control, with more gold than any other country in the world, has to-day 2,000,000 people out of work. What, then, is the good of putting before the people this sticking plaster for a wooden leg, by telling them that if we only restore gold in the currency we shall have better times? It is merely feeding the people with plausibilities not possibilities. You can alter the arrangements, financial and otherwise, as much as you like, but there is one thing you must alter, and that is the very basis of the system under which we are living, so that the workers who produce the work shall control it.