The Socialist Forum: A question of gold and prosperity. (1931)

Letter to the Editors from the December 1931 issue of the Socialist Standard

A question of gold and prosperity.

Editor of Socialist Standard.

Sir,—Your notion that the relation between gold and trade depression is “an illusion,” and that it can be “easily dispelled” is erroneous. The relation is not, as you seem to imagine, such that the stock held by individual countries can secure their prosperity in face of world depression. The relation is between the rate of increase of the world’s stock of gold as against that of other primary products, and the statistics for the period 1850-1913 show that when this relative gold supply was increasing primary prices rose, and that when it decreased their prices fell—vide the figures and chart of Professor Cassel and Mr. Kitchin re-published in the first interim report of the Gold Delegation of the League of Nations. The ill effects of a downward trend of prices upon industry and employment are well established, and the relation between gold and trade depression is now only disputed by those who are concerned to maintain a deflationary policy, or who are ignorant of Professor Cassel’s work.

Geoffrey Biddulph.

Church Street, S.W.7.

October 18th, 1931.

Reply:

Mr. Biddulph “corrects” a notion which we do not hold. That he attributes it to us can only be due to careless reading of the article in question. We made it quite clear that we were concerned (as indeed, we always are) with the main problem of the workers, not with the problems of different sections of the capitalist class.

The difference between Mr. Biddulph and ourselves can be illustrated from his notion that rising prices, due to an increasing supply of gold, mean prosperity. We do not deny that prosperity may come to the manufacturing and trading capitalists : but what of the workers?

The table to which Mr. Biddulph refers us, and from which we have ourselves quoted recently, shows a very great increase in the world supply of gold from 1890 to 1914. Do we, then, find the workers prosperous? In 1901 Mr. Seebohm Rowntree found a third of the workers below a very meagre level of existence which he called the poverty line. In 1903 Sir Henry Campbell-Bannerman endorsed Rowntree’s findings and declared that “about 30 per cent. of the population is living in the grip of perpetual poverty.” In 1904 Sir Leo Money (then Mr. Money) ascertained that 96 persons out of every 100 died owning less than £100, while the other 4 out of every 100 possessed an average of over £9,000 each. He found that about one-seventieth of the population owned far more than half of the entire wealth of the United Kingdom.

If this is what Mr. Biddulph means by-prosperity—i.e., prosperity for the few—we do not dispute it. But we repeat our statement that the main problems of the workers have nothing to do with the supply of gold.

Ed. Comm.