Currency Reform

Dominion, Volume 26, Issue 32, 1 November 1932, Page 11

Currency Reform

Sir, —I regret that it is necessary for me to reply to Mr. Cederholm’s letter in your issue of 25th ins't, and trust you can bear with me for the last letter I will write. Air. Cederholm states and reasons in his own peculiar manner that “stabilised currency, carrying with it stabilised wages, prices and profits,” boiled down means' fixation of prices and everything else by the State, and then makes the claim that this is just that horrible thing Socialism. I may add that I am not a Socialist. I will explain for my correspondent that “stabilisation” is not “fixation.” By “stabilisation” I mean the establishment of prices at or about a certain level with as little variation above or below as possible. It’ he will look at ■my last letter he will find a reference to this in my quotation of Professor Fisher.

If currency were stabilised (i.e., there were no violent expansions nor contractions' of the amount of circulating money) surely prices would stabilise themselves. No control by the Government would he necessary. The vitally essential thing is that credit should be controlled by the 'State lor the benefit of all its people. However, sir, I do not propose to argue the matter further here. Mr. Cederholm has not refuted nor disproved any of my claims based on stabilised currency, and until he does so I shall not further discuss the matter. He will find my views on (1) the danger of tying pur currency to sterling; (2) the establishment of a high exchange rate; and (3) the stabilisation of prices; all supported by Professor Belshaw as reported in your issue of to-day. I would also mention Reginald Ale Kenna, the Macmillan Report. Professor Fisher, the great majority of New Zealand economists, the producers of America (who are combining in a fight for an “honest dollar”) and others of whom my correspondent must be aware. In closing I would like to utter the warning that New Zealand is courting disaster if she adopts a central bank scheme as suggested by our great friends Sir Otto Nienicyer and Professor Gregory.* —I am, etc., J —S. WILLIAMSON. Wgton., Oct. 27. ■