PRICE LEVELS.

Press, Volume LXVII, Issue 20308, 6 August 1931, Page 17

PRICE LEVELS.

TI0N Sot?ly M ° NETARY pBESS by professor tocker rtfl Chamber of Commerce room was j to capacity when over 100 memp* tlic christchurch Accountant J** 0 , goeietv attended to hear 5 Toeker speak on 2n d Pri.-e Levels," with "Preference to Sir Otto Niemeyer's P7 Jlf if. A. C. North (president) ie d the chair. M the present time great interest . E ; lo ivn in the connexion bobanking and the price level,' 5 \i professor Tocker. "This is due to the widespread belief that *«t heavv fall in prices is duo * Motion 0 f" money. Examination "Snz returns in many countries i f a ij g to show that dellation jhe fall, and it appears that ?*riM decline has been caused * Jbv conditions over which bankhave no control. In America, ®'*«tiuice bank deposits increased Ulr between 1922 and 1923. There corresponding increase in prices "•"Lb j,„t prices of shares increased e than proportionately. »L other countries also, events point i! conclusion that the general level P rices should bc related only psrtieular part of the monetary Ljlr which might be called the com"rculation. Tliero is another I s monetary supply which :ermed the financial circulahich might be a greater or. ion of the total supply. iay control the total supply they cannot control the prolich the public elect to use eial and for iinancial purttively. Consequently the circulation might increase greatly and prices might ill without any variation in uantity of money. Igemeut of Currency, ygj therefore, that the conbankers can exert over very limited. Price moveiuo to many factors, and of money in circulation is of those factors. During and &g the war, however, the inflation !$£ occurred showed that effective over the volume of money is ppjji! to Bound monetary conditions dt» JOund business, and in most gjjjjgj central banks have now been tiMlibed to supervise the manageof currency. Such central banks pjgt commercial banks, and are (Mlemetttary to, rather than com--oia with, commercial banks. iopOrtant recent step has been IfeetUblishment of the Bank of InterjifM*! Settlements in Switzerland. fg hope luu been widely expressed It the agency of this bank feftttiTitieg and policies of the ueny| tiekiof the leading countries will ItHrdieated, and hence a greater, "mfn tf 'ntionalisation and co-opera-inviQ be secured in the international mnymiit of money. Should this bo jlHUjHwuj credit conditions, and busiaational and international, uH'tcw & sounder basis and would tyjjhSArlHi isuch more stable. Tho riwaiy made to secure co-opora-

1(1 it isaSajf with the German finanWflMiiedieate that very good reato wy to expected from such coIfgolatioa Overdue. Zealand, where the gold Mir bee* suspended and the riBRKb been da a paper basis lome definite regulation of WWOUJ system is long overdue. ■|SHlf«ur ago, Sir' Otto' Niemeyer ijMJfc* Zealand to report on and exchange regui report has now been pubGovernment. It recommfe ika establishment of a Central Awn Bant,' whose main function 'jmanage a uniform note maintain stability of ex-tap-'utf of eredit conditions. The be entirely free from politi--13 aid have its profits mid have certain privii exchange for the re* has to undertake, be expected that any monetary system could ipletely from the effects ions in world prices of nqport, but the Niemeyer i a means of monetary li is consistent with iee in New Zealand* relied on to maintain iof currency and cxieh* might, at the same oar methods of credit ke possible substantial inch it should receive deration." to provided many en* the professor gave full >lies. A vote of thanks closed the evening.