GOLD AND MARKETS.

Auckland Star, Volume LXII, Issue 166, 16 July 1931, Page 23

GOLD AND MARKETS.

With the rejection of a shipment of 011 r butter recently in England, together Soviet competition, following heavy increased tariff duties imposed on our in Canada, all of which must St detrimentally on our trade balance overseas, I think it is high time that jiew Zealanders realised that the shortage of money now being experienced by ah trades, businesses and professions is lively to become worse instead of better if the causes of these handicaps and are not faced and remedial measures adopted to combat them. The "cornering" by the United States and Trance of a large proportion of gold is the primary cause of the trouble.' It w wrought tremble amongst traders and brought about such a chaotic state in the business world- that the moneyed classes, lacking confidence in such uncertain times, further aggravate the position by holding their money instead of investing it. The remedy, therefore, appears la be in the hands of the countnesnow being strangled for lack of money to lighten the burden. Absence of gold forces the issue of paper money, and as nothing better can be used at present, the general public, who have built up the assets which stabilise such currency, should get the benefit of it, instead of trading banks making large profits for shareholders, who perhaps have never set foot in the country. This could! be brought about, in the case of Uew Zealand, by promoting 'a board composed of financial experts to safeguard inflation tendencies, and make a fudicious issue of New Zealand paper currency in the form of notes, to replace those now used by banking institutions in the Dominion, the difference being that this Dominion would get the benefits accruing instead of the banks. With its valuable assets and resolute people to improve them, New Zealand could, ■with safety, materially increase the number of notes in circulation, and as a result find productive work for many of the unemployed, whose labours are now being wasted, together with the unemployment levy tax money spent on them in non-productive and almost useless undertakings. Constructive and reproductive work could be carried out, and we would then get some value for our money. At the present time we are working and spending without getting value in return. A stalemate exists although we possess the assets to lift us from impotence to prosperity; but to reap the fruits of these we must create a means of exchange other than gold to take the place of the hoarded gold which this country is being deprived of for development; otherwise our industries and productive power will- be left at the mercy of foreign countries to drift into further difficulties. Gold, as a means of exchange is a metal only, and if it is taken out of circulation by hoarding, some other token of exchange will replace it, and if the hoarding continues, gold will become so much junk. He importation of American motor cars is draining the Dominion of thousands of pounds sterling annually. This transfer of cash is detrimental to development, and a restriction on these importations for, say, three years, should have a beneficial effect on the money market. A. H. WTT/KTE.