ABOUT MONEY

Press, Volume LXXI, Issue 21404, 21 February 1935, Page 9

ABOUT MONEY

TO THE EDITOR (If I'HK, VIIK.SS. Sir, —The leaders of the Labour party, the Douglas Credit Society and many of your correspondents, tells us that all we are short of is money, and would make matters right by issuing a sufficiency. Now it is well known that there is an excess of money in existence, and no investment for it; the lower prices of primary products do not require so much money for their exchange with services, and with one another. Still it is proposed to issue more money; the unemployed for example, will be given 10 to 15 millions annually. They already receive some 3.500,000 annually from the community, that is to say the taxpayers give them goods and services to that amount free. If 10,000,000 of money were issued and given to the unemployed it would just mean that the community would contribute ten millions more in goods and services to the unemployed. There is no escape whatever from this conclusion. Then, as to the effect on the currency, it would be "watered" every time such an issue of money was made and every dose would remain in the system like a toxin, causing discomfort and ill-health. Bank money as our Douglas credit friends constantly remind us, is being constantly issued and cancelled, but there is no provision for cancelling this "non-re-turnable" money. The Government would issue it and could alone cancel it by taking it in payment of taxes, customs duties, rents for Crown lands etc., and then destroying it. But, in that case, what would become of their revenue? Money issued in the way advocated by the Labour party and the Douglas Credit Society is not money at all- it is a levy or an order on the goods and services of the community. But directly one of these orders is accepted in trade as payment for goods or services sold, then it becomes money being a credit for the goods or services sold. It would certainly clarify the ideas of some of your correspondents if they could agree on a definition of money Money is a credit for goods or services : it can be produced only by the sale of goods or services and can be made use of, or realised only by the buying of goods or services. It has been called the medium of exchange; it is more than that, it is metaphorically the soul" of goods in the life of 'trade It has also been called "a store of value." This is entirely wrong Value resides only in the goods or services which money represents: it might be called a store of credit, and the banks' gold a store of value.

I write with the object of trying to clear an obstacle from the path of recovery I admire the earnestness of the Labour and Douglas credit parties and their desire to serve. They are especially to be commended for organising and trying to do something I would see their energies turned into a practicable channel.—Yours, etc., " JM W Hilton, February 19, 1935.