CURRENCY NOT INFLATED

Gisborne Herald, Volume LXXV, Issue 22823, 18 December 1948, Page 4

CURRENCY NOT INFLATED

Repeated statements are made that our currency is inflated. That is not true. Remuneration to labour is based upon the cost of living and currency must, follow the price level or the people must starve.

Currency is issued, essentially, as a purchasing power with a definite objective and that is the actual duty and the reason for the Arbitration Court. To accuse the Government is to defame this Court. All awards are made plus security tax and the collection of this tax is the only known method of keeping an ‘earmarked’ currency in suspension and circulation. To prevent it from being absorbed by inflated prices, price control is enforced. The idea that goods in evidence must balance money in circulation is somewhat peculiar, as it enforces that measure-for-measure principle which is pure socialism and anathema to the businessman, who, to be successful, must receive more than lie gives. Exports have but a remote hearing upon currency, as currency is more closely related to home building and fixed wealth. Unfortunately, this Is held as collateral and is debased with the fall of price and the failure of productive values to cover hank advances.

London funds automatically become bank property and when Mr. Massey pinned this fund to New Zealand’s purposes, he incidentally made the Government liable to the banks for any fall in exchange value; therefore, the recent statutory payment to the Reserve Bank has nothing to do with currency, and to take £21,500,000 out of circulation is a physical impossibility. Someone has blundered. Reference Mr. Holland's statement published on December 16. jas. Morrison.