VALUE OF THE £1

Gisborne Times, Volume LXXI, Issue 11327, 3 October 1930, Page 2

VALUE OF THE £1

spunI'.STED Yv KiTIN(MIUWM. EFFECT’ ON PRICE LEVELS. “The experience of the world during the last lift eon- years has surely shown that inflation is worse than the disease it. attempts to cure.” said Professor A. ]{. I'oeker, ot the Chair of economies at Canterbury College, eomnienting on the suggestion that the sovereign he written do 11 n to- 15s witliin .New Zealand. “It is, theoretically perfectly possible to write down the value of tho Cl !o 155,” said Pro lessor Toeker, “but tho result would bo a premium of “5 per cent, on (be price of gold in New Zealand, and a rise in • it--neighborhood of 'Jo per cent: .in all prices in (lie '.Dominion, including/ those, paid tor our imports and thoso received lor our exports. It would, mean a similar addition to, the cost of meeting interest on debts hold overseas. “ITiloSs wages were raised it would mean a. 'decrease to the same extent in their purchasing power,, and. also, in that of fixed incomes—would be ■ inflation pure and simple,' and would set our exchanges on London and elsewhere at/ new levels, and would probjihiy oceasioiV a temporary boom in New Zealand.- , •“If stabilisation •of any kind is needed, this is,certainly not the way to achieve it.. There would be many troublesome adjustments, to make before prices, production, and trade* found their new equilibrium. Wo could find otfrselves in diflinilties calling' for a fresh', writing down to, say, ]os,- and the profess would go on indefinitely.- "L “New Zealand is at very close to the gold standard Winch prevails throughout most <>l the--world-The adjustment's necessary to 'set iu>r house in order, are sight compared with the troubles that uoimt probably ensue upon suck a devaluation of eurrency as is suggested.’’