Monetary Reform

Dominion, Volume 33, Issue 282, 23 August 1940, Page 11

Monetary Reform

iSir, —There is a story of two Eastern tribes who carried on their affairs in a condition, of successful partnership. One. tribe was composed of fighting people, who as their share provided security, and the seed necessary for the yearly crop; the other, of peaceful agricultural folk, who performed all the labour necessary, the resulting harvest being shared equally between them. War can never be carried on economically, the waste and destruction entailed being the opposite of economy, and only along the lines suggested above can a following social catastrophe ‘be avoided. It must be realized that solely in greatly-increased production have we any hope of an escape from a severe shortage of the necessaries of life in the not-far-distant future. Not only must tho .share of the work of the community of every non-producer be done for him and for his wife and family, but it must be done without increased pay. In addition to this, it must 'be recognized that every withdrawal of money from the people resulting in a lessening of the purchasing power of the community has the effect immediately and inevitably of stopping production, so that while rates and taxes and direct interest charges call for an increase in that direction, their exaction lias tho precisely contrary effect, a cessation of work being automatically caused to the same value as the money withdrawn.

To attempt to meet the difficulty by the circulation of printed money or credit in any form to take the place of the lost purchasing power is to go from bad to worse. While the money that has been withdrawn remains in existence, even though as a result being used uneconomically it has lost the one quality that gives it its value, that of representing goods and services, it still claims the power of commanding G.S. and 5..5., so that though production may have been continuous owing to the introduced medium, inflation will result, there being two items of money to one of real wealth. On the. other hand, to use again a quotation from Lord Milner; “The removal of a burdensome tax, whether paid iu money or in labour, is promptly justified by an increase in the productive and purchasing power of the people.”'—l am, etc., BEATRICE M. HOWES. ’ August 17.