§ There were two special departures in the Budget of last year to which I must at this point refer—the restoration of the Gold Standard and the imposition of the Silk Duties. I think it will be pleasant for the Committee to linger for a few moments in the region of silk and gold before we come to the more severe stages of our journey. It was my duty last year to declare the return of this country to the Gold Standard. This decision was only the culminating act in a policy unswervingly pursued by all parties and all my predecessors since the War. It fell to me either to achieve or to abandon the prolonged attempt. Can anyone doubt that the choice was right? I am not gong to argue the theoretical case, but when, after seven years' consistent effort, the goal was found to be within our reach, what folly, what inconsequence, it would have been to cast it away. Many attempts are made to swim the English Channel. Unhappy is the fortune of those who, after swimming the greater part of the night and day, get within half-a-mile of the shore and then have to give in. This was for us a case of either landing while the tide and the sea and the temperature of the water were favourable, or else being drifted back out to sea to the utter waste of all our previous exertions and with she certainty that the opportunity would not recur perhaps for several years to some. Nobody, I am sure no responsible person, certainly no one who occupied the position I hold, would in that situation have taken a different decision from that which I took.
§ What has been the broad result? The dollar exchange returned immediately to parity, and it has remained virtually stable ever since. A gain of only 10 cents in the dollar exchange saves us on our purchases from the United States, especially cotton, bacon, and wheat, £5,000,000 a year. On our war debt to 1697 the United States alone it saves us £750,000 a year. A 10 cents improvement in the exchange in our favour procures us on the capital of our foreign investments, the vast bulk of which are payable in sterling, a gain, which may be estimated in tens of millions, in the appreciation of the value of those immense holdings. These are definite and provable advantages, but there are a great many others. The bank rate is no higher than it was last year, no higher than it often was before the War. It would almost certainly have been lower now but for the uncertainty of the coal situation. There has been no sensational exodus of gold We have only reduced our reserves from £154,000,000 to £145,000,000, and that in face of quite exceptional demands for gold from India. We have had no need to use the powerful trans-Atlantic credits which, for greater security, we took steps to provide. The cost of living index has declined seven points; that is to say, the purchasing power of money and the real value of wages have increased by seven points. The exchanges of our great gold-using Dominions, Australia-, New Zealand and South Africa, have all moved in our favour and are now in close normal relation with us. But the most important fact and the most important gain is that we stand to-day on a basis of reality. Whatever adjustments in international price levels were necessary had largely been effected before our return to gold. They have since been completed. Our prices are now in favourable relation to those of the United States. We have no need to contemplate contraction or deflation in any form. Whatever return there may be of prosperity stands upon a sound and solid basis. We may not be soaring in the clouds, but there is at least firm ground under our feet. All around us we see, in many disillusioned countries, the bitter trials of currency depreciation and the almost universal effort to reach the same secure foundation which we have at last, and I trust finally, regained.