affairs which one would expect South Africa, essentially a primary producer, to try to perpetuate.
He summed up as follows:
In
conclusion I should like to emphasize again the main point I have tried
to make. There is no such thing as financial independence, and there is
no such thing as a 'natural' currency system.21 At the
present time we have to choose between two systems, both of them
artificial, and both of them outside our control. One of them, the
'international'21 gold standard, is at the moment dominated
by France and America, and these countries are pursuing a policy that
has led, and is leading, to ever-falling gold prices and the ruin of
the primary producer. England has broken away from this system, and is
managing her currency with the idea of keeping the purchasing power of
the pound steady, with the object of increasing the prices of primary
products. To follow sterling must increase the price which we get for
our products in the markets of the world. Are wc to throw away this
advantage, the chance of getting better prices for our primary
producers and of seeing mining development, simply because we cannot or
will not understand that the gold standard, as it existed before the
war, has gone never to return?
♦ VIII ♦
The appointment of the select committee gave the gold-mining industry another opportunity of putting its case.22
It traversed familiar ground, but it did so on the assumption of a
change in the monetary value of an ounce of fine gold from 855. to
113s., i.e. a devaluation of the South African pound (in terms of gold)
by 25 per cent. Costs might rise somewhat, but undoubtedly the margin
of advantage would be very great: the rise in costs would probably not
exceed 3 per cent, but even if a 10 per cent increase in costs were
assumed, there would remain (given, further, the level of taxation and
of the Government share of profits) a figure in the neighbourhood of
.£8 million net to the advantage of the industry. It was not a
question, however, only of immediate advantage:
The
permanent improvement in the position of the gold-mining industry would
not indeed be represented nearly so much by an increased profit per ton
as by a lowering of the pay limit and the working of ore which under
21 These inverted commas are not in the text as printed in Hansard, but they are obviously necessary to emphasize the points which the speaker—and very rightly so — was endeavouring to make.
22 Vide 43rd annual report of the Transvaal Chamber of Mines, pp. 55-67.
