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The New Zealand Railways Magazine, Volume 6, Issue 4 (September 1, 1931.)

Shock for the Gold World

Shock for the Gold World.

How much the standard of living was imperilled was not revealed till two or three weeks after the MacDonald-Snowden-Conservative-Liberal Government had been formed. The issue between the Labour units in the Cabinet, and the Labour body from which they have been cut off, was at first simple. Messrs. MacDonald and Snow-den stood for a balanced Budget and for the gold standard; therefore, they said, unemployment relief and social services must be cut down. Labour as a body replied that Budgetary and gold standard principles could be made to fit; and that in any case, if it came to be a choice between a balanced Budget and relief expenditure, the latter should stand. Briefly put, that was the issue on which Labour and its leaders parted in August. But, before September was three parts spent, international finance had followed such courses that the Bank of England rate rose from 41/2 to 6 per cent., and Britain went off the gold standard.