FUNCTION OF CURRENCY.

Manawatu Times, Volume XLVIII, Issue 2433, 26 July 1924, Page 11

FUNCTION OF CURRENCY.

ADDRESS BY MR ROD ROSS. A very instructive address was delivered to the Mannwatu Philosophical Society last evening by Mr' R. Roes, who.'explained tho “Functions of Currency.” Modern society, the speaker stated, had evolved into a very complex and interdependent economic system, with the result that to-day it was absolutely essential that men aspiring to become members of Parliament, should become export economists. Specialisation in economics by politicman considerably, and it was not unmet! icine and in the law. All can didates for Parliament should be compelled to pass an examination in this subject before benig allowed to stand for election. In dealing with the question of the value of commodities, tho speaker said this was one wh-ch. puzzled the,' lay man considerably, and it was nuol until Adam. Smith, in his volume on the Wealth of Nations, tabulated the labour vaiue theory, that any cleai thinking on this important subject was nossiijiO. Briefly put, this theory waf that the value of a commodity _ deMended upon the amount of socially necessary labour power required in its production.. It followed, therefore,, that the things upon whic no labour had boon expend ■ ed. had no economic value, such as air sunshine, virgin land. etc. Whilst labour was the determining factor in value, so was the price of commodities determined by the law of supply and ct rnai’d, and.when to supply and dodemand and when the supply and demice would be found to be slightly above the cost bl pi eduction. Fluctuations :n the supply and demand were the rule in tho markets c< the world, hence the price rose and fell in sympathy, but It would },■ found that it never foil for any lenvtl of time' below the cost of production. Money hud evolved through various stages, and had at different times been cattle, sheep, shells, etc., until to-day gold had become —at least in theory— the basis of our medium of exchange. One of the leading economic authorities. Paul Grave, hod defined money as being . any commoditv. whatever its substance or form which, by local enactment .or convention, was accepted as a medium of exchange. But while gold was the basis In theory, in actual practice. naner money had almost entirely supplanted ‘t, and tlie business of U-e \yorld to-dav was a Footed , bv bids of exchanc’c. drafts. cheques and notes. But wbi’e cold aw a tbe basis in M-nts ebano-o fvorn S-Old to nine- "’as file result m’ tbe Improvement of tbe br, nT-iritr S-Cf-’V tmt tbe CM-b Of tbe nibitr, r-ond nope«> In tbe banks.. “Tbe now/,,, of . tbe bovVq ” on nr,- Pnss “boa- fo.dnv beoomn f o - top o-reot; and «bo fSnop la rot to- oK-lont M-.ben if. win’ ho fmird to fvnnsfp- tb: . power into the hands of the nation.” The latest improvement was the

credit system, which added tremendously to the power of the banks. Goal find anted, in value, and hence its instability as a measure of value. In conclusion Mr Roes sta,u.d that one of'the- most important lessons which was taught by the study ot economics was that money was never capital. Capital was simply that portion of the results of labour used to facilitate the product:™ of wealth. The speaker was accorded a vote d thanks. '