MONETARY SYSTEM

Ashburton Guardian, Volume 55, Issue 243, 27 July 1935, Page 3

MONETARY SYSTEM

REFORMERS ADVOCATE CHANCE

MINISTER IN REPLY.

(Per Press Association). INVERCARGILL, July 26,

“Discussions of the monetary system are much in evidence at present. Many different systems have been, and still are being advocated by monetary reformers as being preferable to the well-tried existing system,” said the Acting-Minister of Finance (the Hon. Adam Hamilton) in the course of an address to the Southland provincial executive of the Farmers’ Union today. “Because.the present system is not working perfectly,” Mr Hamilton continued, “the' so-called reformers would work, and serve the people better. So far, I am bound to say, none of those advocating a change ol system lias been able to inspire confidence in those experienced in this subject and responsible for its operation than the present one. Great Britain appears-to hav.o adopted the soundest of ail monetary systems and is managing her money in relation to both gold and .roods. Britain’s pound sterling is at present linked to gold without a fixed gold value. The value of her pound is determined more on the price level of goods. Britain has set aside many millions of pounds as a secret fund to maintain her pound sterling, as an agreed upon amount. Since Britain went off the gold standard her pound has depreciated very materially m terms of gold, hut remains fairly constant in its purchasing power ot o-oods. This appears to be the most practical method of handling any monetary system. Indeed, this is uio New Zealand policy, and what many ot the so-called monetary reformers are advocating is already being done. “In these days wo hear such expressions as costless credit and an issue of credit, and we are asked to believe that money can he created. Ihesc are pleasant phrases, but 1 would be sorry to think that our people would be misled into believing that our problems could be cured by any of these methods. I am afraid that if any of these methods were practised, tne consequences would he disastrous. \Xo are told that there is not enough currency, and that currency should balance goocL and services, and that adherence to ookl as a standard for money is a barbarous relic. What we have to be careful of is that wo don’t throw a way the reality for the shadow. Money must represent something real, that is, a physical reality. Credit is bruit upon security and confidence. M e are living in a practical world, and we must face practical realities. Pleasant and easy methods usually fail m tllc end.”