CAN MONEY LEAVE?

Auckland Star, Volume LXVII, Issue 72, 25 March 1936, Page 6

CAN MONEY LEAVE?

WHAT HAPPENS IN PRACTICE. (To the Editor.) Those who say that money may leave New Zealand 011 account of the change of Government do so from ignorance of the functions of money, or in an attempt for political propaganda to deliberately frighten the people. During the past few days there has beena rrood deal of rubbish in the Press about money feavin" New Zealand. How can this possibly happen ? The money of New Zealand is of no value in any other country but New Zealand, and the same can be said of the currencies of all countries. Let us suggest that you are in possession of, say, £1000, and you decide to transfer it from New Zealand to England. Is there anyone foolish enough to suggest that vou can go down to a bank and draw £1000 of Reserve Bank notes and post these to England? If you did this you would discover they have no value in England, unless they are returned to New Zealand, and it would cost you quite a tidy sum to carry out this little manoeuvre. Your only method is to go in to your banker and ask him to give you a draft on London. Ho does this, but before you can collect your money in London he must, with the money you give him, buy £1000 worth of New Zealand butter or some other commodity that is being shipped to Eng-, land, and when these goods are sold in England, the English people who buy them furnish, you with your money, but your money never left New Zealand; it went into the pocket of the farmer, who produced the butter, and surely no objection can be taken to this. If, however, you take the trouble of posting New Zealand notes, or any form of currency, out of the country, then New Zealand will have no complaint to make, as New Zealand would not have to meet the demand. Those who are concerned about money leaving this country, let me assure them that money never leaves this, or any other country. It is merely the yardstick which measures the value of the commodities that are exchanged between the New Zealand people and tho people of other countries. Political propaganda, however, might reduce the value of your money, as was done in 1933 when political propaganda reduced the value of the New Zealand £ by 25 per cent. This had the effect of reducing the real value of all New Zealand securities to a greater extent than was ever done in the history of New Zealand. Honesty in the Government of the country will restore that value to New Zealand's currency, and with it bring about the restoration of all wages, incomes and investments. J. HISLOP.