A FIDUCIARY ISSUE.

Auckland Star, Volume LXIII, Issue 137, 11 June 1932, Page 8

A FIDUCIARY ISSUE.

CREATED WEALTH AN ASSET.

(To the Editor.)

Your correspondent "Vigilante" omits to record in his general condemnation of any alteration in the world's monetary system that Great Britain hue for some considerable time issued fiduciary notes without any (as yet) apparent inflation embarrassment. Of course, New Zealand is dissimilar to Britain in that she is a debtor country, whereas Britain is a creditor country, or, in other words, Britain line tangible securities to support a fiduciary issue, as against New Zealand (with national and local body debt) being mortgaged to a saturation point. A fiduciary issue, however, carefully administered, for the development of our economic resources, would not cause inflation. "We will assume, for instance, that £5,000,000 of fiduciary notes are paid out to labour for creating £5,000,000 worth of new farming land from ite unimproved state. On the one Ijand we will call the State iesue a liability, but on the other hand we have created £5,0*00,000 of real wealth and placed people in permanent productive employment. Economists, political and otherwise, should realise that gold is not real economic wealth, for «,ll the gold, in the world could be pitched into the sea to-morrow and the world would continue to exist, ad infmituni, but if the land wae made barren to-morrow all the people on this planet would return to dust within six months —therefore production (and not money) ie real wealth. Notwithstanding "Vigilante's" tirade, intelligent people must realise that a revision of the world's monetary system is inevitable. The world in actual wealth was never richer than to-day, and yet we have the Gilbertian touch of never being poorer as regards placing the unemployed. The whole position is utterly and ridiculously absurd. €. SOOTT.