The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News and The Echo. FRIDAY, JUNE 22, 1923. ASTRONOMICAL CURRENCY.

Auckland Star, Volume LIV, Issue 147, 22 June 1923, Page 4

The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News and The Echo.

FRIDAY, JUNE 22, 1923. ASTRONOMICAL CURRENCY.

For the cause that lacks assistance, For the wrong that needs resistance, For the future in the distance, And the good that we can do.

We have read about the astonishing declines and 'fluctuations in Central European currencies, but the effect of these on life can be understood thoroughly only by those who have visited these countries and actually

seen the changes in operation. We in New Zealand grumble at the rise in the cost of living; can we imagine what it would be like if in a week or a day or two the price of meat or bread doubled, and then, perhaps, doubled again in a few months' time? This is what has been

happening in Germany, and our news this week shows that the mark threatens to sink to the level of the Russian rouble. The mark has tumbled again, and Germans find that they cannot buy necessaries. A pound of meat costs half a day's and a pair of shoes two weeks' wages. It is as if the New Zealand worker had to pay seven or eight shillings for a pound of meat and nine pounds for shoes. Of course, if the mark stays at this low level wages must be raised, but this is the process that has been going on all along, and it has not benefited the workers or any other class. For in order that these nominally high wages may be paid, millions of fresh marks have to be printed, and so the currency becomes more and more inflated.

Germany, however, is not the only sufferer, though she may be in a worse position than any other country west of Russia. There is, for example, Poland, where, so a cable message to-day states, speculation in exchanges has had to be dealt with by the Government. "No one in .Poland knows to-day," writes a correspondent of the "Christian Science Monitor/ "what the contents of his puree may be worth to-morrow." Three years ago the correspondent bought a carpet for 1000 marks, which were then worth about 110 American dollars. If that carpet were sold to-day for the same dollar price the owner would get 5,000,000 marks for it. Two years ago he invested 15.000 marks in a Polish Government lottery bond iseue, in which the inducement is a weekly prize of 1,000,000 marks. The writer thought then that if he were lucky enough to draw one of these prtzes he would bo able to make, a trip to America, but 1,000,000 marks to-day are worth abouc eighteen dollars, which will not take the traveller far. When he arrived in Poland in 1910 the dollar was worth 33 marks, and one could get a good meal for ten marks, but at the time of writing the exchange rate vacillated between 40,000 and 50,000 marks, and 10,000 marks did not buy as good a meal. •And look at the country's finances. fTlic estimated deficit for 1022 was 133,000,000,000 marks. If we reckon this at par it is £6,600,000,000, or something approaching the war debt of Britain — and this, bear in mind, is a deficit for one year. If, however, we take it at current rate of exchange it amounts to less than one million! The deficit is made up by borrowing and inflation, the remedies of nearly every Continental Government. One effect of this amazing inflation is that nobody saves luoney. What inducement is there to put money by when its value may be wiped out in a month or a week? The one thing to do is to spend it before its value declines any further. It is tho same, kind of story in Russia, in Poland, and in Germany; everybody with money seeks to turn It as soon as possible into goods, which may help to account for the tales that travellers bring back from Germany about great prosperity. What is the industrial and economic future of countries where there is no saving, where no reserve of capital is being stored up? One wonders how long society in these countries is going to exist under these.quite unnatural conditions: the danger of a grave economic crash that might pull down political and social structures, would seem to increase with every month that passes. All this is an imperative argument for the settling of the reparations and debts problems on a permanent basis. Europe cannot begin to put its finances in order until there Is some finality in these questions, and financial regeneration is the basis of general reconstruction.