NATIONAL CONTROL OF MONEY

Press, Volume LXXIV, Issue 22570, 28 November 1938, Page 14

NATIONAL CONTROL OF MONEY

TO THE EDITOR OF THE PRESS * Sir.—Mr Hiram Hunter asks Mr W. B. Bray and myself to deal with a remark of Mr Savage to the. effect that he intends to use the Reserve Bank for creation of money. I am unable to speak for Mr Bray or for Mr Savage because, first, I have no authority to speak for either and, second. I do not know what precisely may be the views of either. I, however, would say that if Mr Savage intends, to ask the Reserve Bank to issue money in quantities not greater than may be sufficient to facilitate development of* the potentialities, in respect of industry and trade, of the community, I think, the intention is admirable. It is true that an issue of money possibly would depreciate the purchasing power of money in general, which would mean that persons who hold accumulations of money would suffer, in some 'degree, loss. It, however, is also true that proposals of reformers include ■measures for compensation of such loss. Further to this, it . must be recognised that the purchasing power of money is affected not only by the quantity of money in circulation, but also by the velocity of the circulation and by the quantity of money in bank deposits, ject to check, and by the rate of movements of this quantity, and all relatively Jto the volume of industry jointly with trade. In other words, the volume of industry jointly with trade is limited accordingly as the quantity of money, in circulation, and the rate of movements of this quantity is limited. A meaning of this is that a shortage of money in circulation-ef-fects industrial and cbmmercial; stagnation. From the point of view of persons who hold accumulations of money,, as wpll as from the. point of ■view of persons who ; are less fortunate, no condition is worse. ...In saying, or in implying, that the remark of Mr - Savage is likely to. cause a “flight” of capital from this country with, as a result, lessened prosperity, Mr Hunter is characteristically -illogical.- First, -Mr - Hunter says, in effect, that to increase the amount of the medium of exchange would - be socially- bad. 1 Second, he says, in effect, that, to decrease the amount of the medium of exchange would be socially bad. He cannot have it both ways. Has Mr Hunter, as a champion ;of capitalism, fully - considered what export ot capital at interest means to the exporting country? The interest, ap'Mr Hunter at another time has in effect said, must be paid in the form of commodities, which are a form of wealth. . This is to say that the lending country must receive from the borrowing country something, in the form of wealth for nothing in the form of wealth. Has Mr Hunter forgotten that Britain acquired a great part of her enormous vrealth by exportation of capital at interest to colonies and to other “flel>j of influence”? If Mr Hunter is to remain an advocate of capitalism he must urge us to export, sis Britain exports, as much capital at interest as- may be possible, and to cause our Reserve Bank to issue, as the Bank of England Issues, such credits as may be needed to meet re•quirements of the usurious business. For my part I recognise that the word Britain, as here-used, does not signify the people of Britain, but the finanof Britain, who, by means of interest and other “rake-off.” acquire to themselves enormous profit at the expense of the people. More than 80 per cent, of the capital of Britain is owned by less than 6 per cent, of the population. The point, that is most • pertinent to the, question at issue is that one .of the very plain reasons of the inequity in the distribution of wealth is that control of money is not by representatives of the people but by self-seeking private- financiers. Appreciation of the value of your space precludes me from answering, at this juncture, Mr Hunter’s question as to how Mr Savage may “insulate” this country. in the event of another slump. I, however, beg for space in ■which to remind Mr Hunter that criticism, unless it is constructive, serves no useful purpose, and to ask hin> whether he is able to submit any jfractical proposal, better than that of his opponents in controversy, to the purpose of release of us from the net of the financial oligarchy that was chiefly responsible for the last slump.— Yours, etc., • • • HAMPDEN BOOTH. November.26, 1938.•. : \ CSabfect to the risbto£ rre&ly of A. JWT. I i .Paterson this correspondence is now closed.—Ed., “The Press.”]