UNSOUND FINANCIAL POLICY.

Auckland Star, Volume LXIII, Issue 134, 8 June 1932, Page 6

UNSOUND FINANCIAL POLICY.

DEBASEMENT OF CURRENCY,

(To the Editor.)

The New Zealand Press lias of late been surfeited with correspondence from homebrewed Niemeyers advocating an allegedly infallible panacea for financial distress in the debasement of our currency per medium of the Government printing press. The proposal is camouflaged under the misleading terms of "fiduciary," "reflation," etc. Millions of paper money should, they advise, be reeled off without that tangible security necessary for solvency or just dealing. The nefarious method of raising the wind by debasement of currency has been condemned by every financial authority since Henry VIII., four centuries ago, substituted brass for gold coinage, and the United States last century printed off billions of deflated dollar notes known as ""tccu backs." Recent results of inflation or debasement are a bankrupt Continent of Europe. In Germany the mark became valueless, and now six million men are unemployed. In France the franc lias been inflated down to one-fifth of its normal value in British currency, resulting in the ruination of those who have staked good money in business, investment, insurance, annuities, mortgages, etc.; in fact, all who have a tangible stake in France. As a consequence France has notified her inability to pay her war-time indebtedness to the United States, for which Britain, unfortunately, went security. Britain alone is solvent and lias honoured her obligations and "the word of an Englishman." The ruinous results of debasement of currency, alias inflation, "reflation," "fiduciary" or other camouflage are: (1) The loss of national credit and the impossibility of raising loans or renewing them; (2) the impoverishment or ruination of those citizens who, by industry, ability or thrift, have won a tangible stake in the country enabling them to pay income tax, our present mainstay, and to employ most of our population, to which classes the letter-writing wizards of frenzied finance here referred to obviously do not belong. However, New Zealand proved itself at the last general election sound at heart, and the proposals here referred to have no better prospect of realisation than our Ottawa team has of cozening the British lion. VIGILANTE.