THE MONEY QDE9TION.

Hawke's Bay Herald, Volume XXX, Issue 9894, 22 January 1895, Page 4

THE MONEY QDE9TION.

SIB,— Mr Ellison complains that I evaded or Ignored the issues In' his reply to my letter. I regret having been unable to understand his letter la the way he intended it, os I replied to every point which I oould sea. that he had raised. Another parnsal of the )ebter reveals nothing further, bat I have mnoh pleasure In endeavoring to answer ihe q aeries raked in his last letter. In Teply I have to say that the money of the country should be a "legal tender" for all debts and payments, pablic and private. In a letter to me the Hod. G. C. Hackstaff, who is a high authority on tho question, pays : v Another monetary piinciple is that not anjtiblag^Jfl. money unless It Is lull in its. legal tender qualities. There most be ho exception clauses ia it, for, if ISliaa-fhe latter, it Is not full money, and is estopped from performing the fall f anotlons of money. It must have no exception clauses in it to catch those who are not up to the trick, aod the Government that issues it should receive it for •11 taxes, dues, imports, license?, &c, and pay it oat again. It la collected from the people and should be paid back to them, so that id is not interfered with in keeping up its constant round, by which process the Government derives its life. The causes of the failure of the greenback were that, while the Government eould pay it in satisfaction of publio obligations to the extent of its face. value, it could not be received in payment >of taxes, Interest, private loans, &o. j and the result which afterwards followed from these exceptions was clearly pointed out white the measure was passing through Congress. The money issue in New Zealand must, therefore, be full in Uh legal tender-qualities. If 1b is issued on that basis and limited in quantity to the basis of security already proposed, it cannot depreciated an§ aState note of £1 would be just as effective for- exchange and payment of 4ebt as a sovereign. No freedom oteon tract should bs permitted to violate- the lav in this respect more than toy other. It was this freedom of contraot which brought ft boot the present money system and monopoly of gold, with its attendant mlaohief. The founder of Lloyds' Bank, who originated the swindle, Was able, by contracting for debt3 to be ' paid in gold in LondoD, to so " corner " the cold th&t he conld diotate to the Government, and cance them to embody in English Jaw what he bad embodied In bis contraote. At one stroke his wealth was thru increased by millions, which he never earned, bat constituted a legalised robbery of the British pablic. That is the sort of thing Mr Ellison defend*,- and wants to see perpetuated. Mi Ellison cannot find, in monetary history, a single proof of his assertion that, if currenoy were declared the only legal tender, one reanlt would be a serious disorganisation of trade, On the contrary, the only means of resuscitating trade on three occasions has been by the proclamation of notes as legal tender payment instead of gold. Indeed, our own Government possesses the power to proclaim bank notes legal tender as a precaution against a financial psnio, with its consequent disorganisation of trade. The sound statesman bnilds bis constitution to avoid the quicksands which history has shown la the rhe and fall of nations. So with financial matters, and here in our midst is already reoognised the principle which I have been advocating. If tbat principle has been found effective in periods of crises, bow much more effective must it be even In times of depression. Mr Ellison's sheepfarmer wonld be only too glad to get an effective means of paying bis debts, without waiting to ask whether It was to be gold, or State notes, with the whole wealth of the nation behind them for' their redemption ; and the same, remark applies to the itineration of the civil Rervant and his Income tax. The' Government roust Dot pay one eprtr of money and receive another, ■Lit must be jasfc to ja!f, an4~accep*>4h.at Hyment which, JTmakesr. Mr Eilisofr Son tends my quotations have no bearing Bnß debt-laden country like New Zealand Its. How. then, do^B he explain that it [has ever been the fact of being deb tflndeo, and unable to pay its way In gold, that has forced a nation into the report of M^tofeiJgnho ; and tha*, white there\hßve HRh failures frow^vHend caosetfsihe bees an unqualified sneezes ■^^■K^'omio conditions have Seen H^HBTeredto? Mr Ellison's referfeneo of madnees " is very cotfnplithe many great poKltlcal jH|H^P and noble merc tftbe past fflenal service on the the natioDs of their time, and to see he will give the' matter farther consideration than to come to the usual prop of a weak eanse :— " No owe ; abuse the other side." Mr Ellison complains that ra> proposal diverts attention irom tbe real remedy, bimetallism. I beg to differ. Bimetallism is after all an International question, aod New Zealand caDOOt afford to wait for its reallaa tlon. With a deficit of two to three millions in the balance of trade, and an export of gold bullion of nearly a' million a year, it Is necessary to consider wbifc the remedy shall be. There mast be either remedy or disaster. The scheme wbloh I have submitted bas proved a remedy again and again, as it has enabled nations to circumvent the results of Bcarolty of money, to increase their exports bo bs to tnrn the balance of trade in their favor, to payoff their national debts, and to enable their prodncerß, by provid* lngtne*i with cheap money for employment of labor, to compete successfully against falling prices and bad times. Personally, I have to thank yon for yonr great kindness in allowing the liberty of discussion of this snbiect, and I believe that many of your readers will feel grateful to you for permitting yonr columns to be made the medium of all shades of opinion on bo important a question.— l am. &0.,

E. A. HAOOEN, VTootlvllle, January 17, 1895