Currency Problems

Dominion, Volume 26, Issue 49, 21 November 1932, Page 11

Currency Problems

Sir, —I thank Mr. W. S. Cederholm for his reply. Referring to his views on Mr. Redman’s suggestion, published on November 10, I think he was writing of Treasury notes and thinking of Treasury bills. A. Treasury note would be better understood if it was described asl an unencumbered asset created by the people’s Government, in the form of currency, and •held by the Government for exchange with goods or services rendered to the State. The only debit to the Budget would be the small printing cost, which I will here neglect. The main feature of Mr. Redmonds suggestion was that a gift of two one pound Treasury notes should be made to every holder of an unemployed levy book. When a gift is made one, as a rule, does not look for any return, yet Mr. Cederho-Im states that what the State giveth the State taketh away, and talks of taxation to get back the gift. Mr. Redmond asks: What harm would be done? I can see nothing that is not good in the suggestion. There can. be no talk of inflation for it would take many gifts of that size to satisfy the needs of •this Dominion for currency in circulation and inflation cannot start until that demand is satisfied.

Reading a news item this evening, the national debt has been increased £3,030.000 by unredeemed Treasury bills. Legist lation could have been passed making those bills legal tender, and that debt would not have come into being. Yet the Government place a collar on fowls’ necks by enactment, thinking the latter more important. With the gift an accomplished fact the retailers throughout the Dominion would be assured of £400,000 extra turnover at Christmas, and again in January, for it. is the lack of that currency in circulation that keeps goods lying on the shelves, and instead of being handed on to the people the goods were •produced for. I think the suggestion a first-rate idea, ■but would far sooner have it given to the registered unemployed in. four-weekly payments in December, giving them a little of what they have had to do. without for two long years, and by so doing keep up the real spirit of Christmas.—l am, etC ” RATIONAL. Wellington, November 16.