THE CURRENCY QUESTION

Evening Post, Volume CXIII, Issue 74, 29 March 1932, Page 6

THE CURRENCY QUESTION

(To the Editor.) Sir,—Mr. R. A. Gosse asks for a reply to his "fundamental facts." These seem to be the following:—(1) That "the fact that we are off the gold standard at all is reprehensible, and it is much more to the point to get back to it than to drift further away from it." (2) That "it is idle to complain that the value of money is arbitrary; all our measurements are arbitrary. There are no natural pounds, or pints, or yards." As to (1) Mr. Gosse quotes our New Zealand pound as being to-day worth 13s in gold. If we make it worth 20s in gold, as he suggests, the result on his basis will be that where we now get £1,000,000 in New Zealand money for exported produce we will then get £650,000. In what way this will tend to restore prosperity is not explained. ■ With reference to (2) the statement disputed by Mr. Gosse was that the value of the New Zealand pound has been left by law vague and unfixed—not that it was "arbitrarily" fixed. The pint, etc., are arbitrarily fixed but constant and unchanging measures. On the other^ hand our Government recognises no obligation by the State to make the least effort to ensure that money, the measure of value, is maintained even reasonably constant in value. The basic theory of any money system is that a promise to repay a given sum of money at a future date is a promise to give back the same value that was received. Our money has failed dismally on this basis, and debtors throughout the country are now liable to be stripped of their property because £100 in money has come to mean something totally different from what was contemplated in contracts made three or four years ago. Sooner than recognise that the present money system is defective the Government seems to prefer to see almost the entire mass of the hard-won savings of the active working people of this country, the money invested by them in the purchase of their homes and their farms> vanish into thin air. It is so written in the bond, and so it must be. I do not know whether Mr. Gosse includes* as one of his "fundamental points" the fact that he has a poor opinion of a certain book entitled "The Truth About the Slump.". The material point about that'book is not whether one likes or dislikes what is in it, but whether it is true. Mr. Gosse' merely records dislike—that gets nowhere.; No doubt he would record equal dislike of the speech in the .United States Congress on 15th December last of the Hon. Louis McFadden. Mr. McFadden in that speech declared that GermanAmerican international financiers, who he named, had surreptitiously, by trickery, by stealth, and in violation of law,, used the United States: Federal Reserve.system to pour thirty billions of dollars, over and above the bonds sold in America, into Gerr many, and that Germany 'as fast as: she: got the money was lending it to Russia. The' Russian Five-Year Plan, Mr. McFadden declared, was directed and controlled by German international financiers, and the_ Russian army was being armed and equipped with American money. Mr. McFadden, the author of the above statements, is a Republican Party man (the same colour as President Hoover); he is a banker by occupation, and was for a period- president of the Pennsylvania Bankers' Association, and for ten years past he was chairman of the United States House of Representatives Banking and Currency. Committee until the Democratic Party took over the House, offices last, year. He was thus in a position to have* more than ordinary knowlege of what he was talking about. " ■ It was pressure from American international financial quarters which led to Britaing going back on to the gold standard in 1925 on the precarious basis of gold borrowed from America. It was pressure from such quarters that resulted last year in the fall of the Mac Donald Ministry and successfully dictated the reduction of the unemployment dole in Britain. The Governor of the Bank of England has been perpetually running across to New York to consult with American financiers. Our present; Government financial policy in New_ Zealand ;is largely directed to conforming to Bank of England requirements. /Analysing the / position, one thus finds grounds for belief that the financial policies being enacted- in.; the Parliament of/New Zealand derive their original inspiration from the ;same source whence comes the direction of policy in Bolshevik Russia. ■ The financial . policies imposed on Britain, New Zealand^ and the rest of the British Empire have not been beneficial to the British Empire—and there seems no reason tp think they are ■ intended to be beneficial, to it, for they are policies rof destruction pure and simple. If Mr. McFadden is correct in his statements—and he is far from being alone in his views—it means that our Coalitionists in New Zealand are unconsciously working for the same bosses as the Bolsheviks in Russia. They are certainly creating conditions that may easily be a prelude to Bolshevism.—l am, etc., A. N. FIELD.