A FIDUCIARY ISSUE.

Auckland Star, Volume LXIII, Issue 139, 14 June 1932, Page 6

A FIDUCIARY ISSUE.

'■Vigilante" apparently views with abhorrence any suggestion, practical or otherwise, that would tend to lower the present price of money. In my humble opinion a fiduciary currency by the State can hardly be described as the reeling off of millions of paper money without any tangible assets or security. Does "Vigilante" contend that the assets of private banking institutions are greater than those of the State? If so it only demonstrates the fact that the issue of currency should long ago have been a State monopoly. His numbered objections I will answer briefly: (1) If we can sustain our credit abroad, under private banks, surely we can even expand it under a central bank; (2) that unless something is done immediately there will be a great many people who have been fortunate enough to pay income tax up to date who will find that soon they will have 110 income taxable. "Vigilante" must surely realise that the greatest trouble, nationally and commercially, of to-day is the lack of circulation of money. Also that banks cannot, without jeopardising agreements, do anything much to relieve the situation either internally or externally. Therefore I again suggest that to get out of the miie the banks must come under State control completely, where with the State's larger tangible assets a fiduciary issue can be at once put into circulation, causing a gradual balancc of prices and improved trade. This cannot be termed frenzied finance, but logical finance, whereby all of us prosper a little instead of the select few prospering too much. America is about to adopt the same method. G. F. lI3LIBAR.