STATE BANK NOTES.

Press, Volume LIII, Issue 9515, 7 September 1896, Page 3

STATE BANK NOTES.

TO THE EDITOR OF THE PBK3S. Sir, —I wish to make a few remarks in reply to Mr Henry Laiug's letter in your issue of the 4th iust. Before doing so, I would like to express my wish that you had published the continuation of my criticism on your leader re inconvertible paper notee you mentioned, as soon as possible after my first letter, as had Mr Laing seen it he might not have penned his own remarks on that subject, or at least he would have modified or altered them. With regard to the logic of the quotation from Mr Hutchison's motion, you stated that there was no relation between the premiss and the conclusion. Taking the premiss as true, or assuming it to be so, I still think that there is an intimate relation between it and the conclusion. Shortly thus, if money be entirely a creature of law be taken as the premiss, surely it is a correct enough conclusion that it can matter very little what its form or may be. If this be bad logic will Mr Laing please point it out in detail. 1 ought to tell Mr Laing that I am advocating a new system of banking and financial organisation, and if he has not a knowledge of it he cannot comprehend my ; position, and is sure to make mistakes in j criticising mc. I quite agree with the proposition given. A quotation from Adam j Smith, viz., " Labour is the real measure of j the exchangeable value of all nommo- \ dities." I further say that labour plus j the material on which it is expended j is the only real and sterling value j in the world to mau. That money ! ought only to be used as an instrument to facilitate the exchange of these things of value, and ought not to be value in itself, in its own right, from the fact of i ts being so, in the case of gold, spring a whole host of each, which I have enumerated and stated ■ jt\ detail duriug the last four years. With Mr Laing's second proposition I entirely agree also. With No. 3 I agree with the first part, but n&t tiie second — that countries gold standard io dkeet to

their wealth. And he instances England, France and Germany. It is comparatively only a few years since any of these countries had an exclusive gold standard, Germany only within the last year or so. So that they do not owe the gold standard the credit eithor of the creation or maintenance of their wealth, and India which, perhaps, has been the wealthiest country in the world, never had it. Mr Laiug does not agree with mc in saying that the trade of different countries is not carried on by a transference of gold and notes, but ho agrees with mc in saying it is done by bills of exchange : only he says the balance in favour of one- country over the other must be paid in coin. Well, under the present condition of things I grant that, but what proportion does the said lwlance bear to the volume of the whole trade? Generally a mere nothing, i —Yours, &c, I D. N.U.KJUA. , TO THK EDITOR OF THE PRESS. j Sir, —There seems to be a popular im- j pression that, when a parson understands the currency question, he has attained the summit of aJI human knowledge, and can thenceforward engage himself, like Miss Braddon's character, in "wearily doing his last planet prior to final extinction." Om- j niscience is. not my foible, nor do I think "it is required to see the defects, on the one hind, of an uncovered paper currency, limited only by the goodwill of the issuer, and on the other of a monopolisable commodity currency, such .-is we have at present, and which confers on its monopolisers tribute j levying powers at which the Cresars would have gasped. In tackling this problem the great initial mistake seems to be the oonfounding of the wealth representative with wealth itself. It is of course ridiculous to suppose that wealth can be produced by "a bale of paper aud a printing-press" (almost as ridiculous as it is to suppose that wisdom can be produced by the same means), but it is surely equally ridiculous to suppose that wealth can i>3 produced by a quartz reef, a stamping battery, and a mint. If all the mountains were gold and all the valleys silver, the world would be no richer, but incalculably poorer. The ancient philosopher's stone was said to turn everything it touched into gold ; the modern philosopher's stone is said to turn gold into everything it touches—the one is as chimerical as the other. To have a commodity as a measure of value of other commodities is like trying to measure water with a rule of ice : all the disturbances of supply and demand—all the variations of temperature so to speak—affect the measure as well as the thing measured. With tho social effects of the monopolised commodity currency I must deal briefly. By it the monopolisers are put into a ]>osition to divert labour from the production of the necessities and common comforts of life, for winch the labourers and would-be labourer themselves are famishing, for of these even the wealthy can only consume a j certain amount. They, therefore, employ labour on the production and distribution of unnecessary luxuries, and ou the holding and extending of their tribute claims or vested interests, which have reached such an amount that they alone actually exceed by ; many times, not only all the coin originally ! monopolised on which they were founded, bnt all the coin that has been minted since. And still they continue to grow and cannot be liquidated by labour, for their satisfaction is not demanded in labour but in the special commodity which the claimants own, and which alone can procure similar iniquitous cumulative claims in other directions and regions as yet unexploited. It is much easier to see the evil and the cause of it than to suggest a remedy ; but a State Exchange Bank, with its notes or tokens covered by actual products and made the only legal tender, seems to be well on the road to it. Such notes or tokens would fulfil all the requirements of a perfect money, and would, moreover, be unoxplottable money coined by every producer according to the real value of his production, and would buy for him whatever other product of labour or service he needed. That some such reform is coming by the operations of natural laws, from which not even currency is exempt, is evident, but whether it can be brought about by any short-cut legislative , method dealing with currency alone is not so clear. —Yours, &c, FUKB MuiTBY.