THE CURRENCY QUESTION.

Evening Star, Issue 14118, 22 July 1909, Page 1

THE CURRENCY QUESTION.

TO THE EDITOR. Sir, —Mr W. Goldsbarry proceodo to enlighten my mental darkneas on the currency auestion. If gold i* essential to carying on production, why do we eend it_out of the country in shiploads, instead of keeping it here' where it ie wanted! Why does a country that produces vest quantities of gold every year have to borrow gold in a country that produces none ? If we borrow gold, and pay interest on it, and give heavy reward* betides to the people who .arc good enough to lend it to lie and to the brokers who get them to be good enough to lend it to us, why do we never eight the gold? Says Coghlan, the Australian statistician : "Out of loann aggregating £192,711,000, a Bum of only £28,036,000 reached Australasia, leaving £164,675,000 that we borrowed and never received." The amount borrowed ie merely credited to us in the books of the banks. The payment of the workers constructing a railway is carried on with the money we had before the loan was obtained. Mt Goldsborry says : "Money is not wealth." Quito so. It ie merely a token.of wealth. Then is it not foolish m the extreme to go to other countries for tokens of the wealth we have ourselves created? The plain and simple truth is that meet of the commerce of the world is done on paper. Some authorities estimate that the gold in circulation is not sufficient to cover onc-hundroth part of tie business done. Consider the amount of gold in our banks and compare it with the value of our wealth production, and it will bo at once perceived how much of this value must have had paper for its token and its medium of exchange. If the notes of a bank are regarded as Bound currency (every one of which jb a lie, for they pretend to be convertible into gold, whereas if all who held thorn demanded gold for them the banks could not pay), then the notes of a State, backed by actual wealth, axe much sounder. We have legislated to prevent strike* because they demoralised industry, but tho power of unions to do that is nothing to the power of the banks. In 1893, to defeat legislation, they created a panic in America., ruined 100,000 business men, and <w-t 4,000,000 -men out of employment. We have paid more in interest than the principal we have borrowed, and still owe the principal. If the Government want to construct £1,000.000 worth of railways they could issne notes to that amount, as the requirements of tho country necessitates and justifies, and make them legal p-yment for taxes. If this wore done, they could be called in at an average rat© of interest on loans—viz., 4 per cent.—so that in twenty-five years the whole issue would be extinguished, and the Government, by thus insuing thoir own credit directly, would have a loan without interest or any cost whatever bevond that of printing the notes. Air _ Galdv-berry claims to be a Social ict. There is not a Socialist p.-.rtv or a Labor partv in tho world that favors leaving the currency in private hands. Already tho interest bill on our loans totals nearly half the actual revenue, awl men toil and slave to pay it. Socialism stands to abolish interest, as well as all other forms of exploitation. Tho only way to save tho poople from bank panics and usury is by a State Bank.—l am, etc., „ , J. E. MacManus. July 22. [Gorrespomlcnre closed.—Ed E.S.]