CURRENCY AND VALUES

Press, Volume LXX, Issue 21090, 15 February 1934, Page 7

CURRENCY AND VALUES

TO THE EDITOR, Of THE TRESS. Sir, —It is a source of satisfaction to mc. and I hope to most of the public, that Sir John Sandeman Allen is riot an emissary of the British Government. Considering his views, I hope that public opinion here and the findings of the newly-appointed monetary committee will give the Home Government cause to repudiate him. He says if we paint the English 10s note green and call it £1 we are in the same place. I beg to differ. To illustrate, let ivs take the farmers case. Men who bought farms when lambs were £2 each and other stock of corresponding value calculated oa the continuance of those prices to meet the payments incurred by the price they gave for the arm. These men have met with a 50 per cent., and in some cases more than 60 per cent, drop in prices for their stoc . Say a man had £IOOO worth of stock when prices were up and was paying 5 per cent, interest, i.e., £SO per annum interest. Then the prices went down 50 per cent., and so made his stock worth £SOO. But his interest was not reduced and he still had to pay i£so a year. This means that for practical purposes his interest was doubled and in reality he was paying 10 per tent. . , This is where the manipulators oi the value of money defrauded the public in their policy of deflation, i.e., devaluing commodities. When they devalued produce 50 per cent. they virtually wit drew 50 per cent, oi the world's working capital. They kept the interest up and thereby doubled the world's liabilities. So if we reverse the slump policy and devalue money, making 10s worth .(•] and keep interest steady, stocks ?,nd properly -..i1l ho restored approximately to pre-slump value and thereby the country's indebtedness inlernall'y will dc reduced 100 per cent. Sir John Sandeman Allen says that when America has effected this policy .•she will be in just the same place. But. I maintain that she will have Sot level for the time. If she wants lo progress, carry more people, and make her land more productive <i.c worth more money) she must onset (his increase in real wealth by making that much more money available. —Yours, etc., „„ I KAYE HOE. j February H. .19:14. |