Central Reserve Banks

Manawatu Times, Volume LIV, Issue 7250, 1 September 1933, Page 8

Central Reserve Banks

(To the Editor.) gj rj —A director of the Bank of England is reported to have delivered an address to the Institute of Bankers on December 10, 1924, declaring “it is part' of our official currency policy m co-operation with the Central Banks of Europe, and it is hoped, of the Federal Reserve Banks of U.S.A., to give a world extension to this price-control of preventing undue fluctuations in the purchasing power of gold.’ ’ * The fact that stabilisation is to be aimed at is proof of the way in which the interest of the bankers diverge widely from jthe interests of the public. The primary essential of a currency is not stability; it is that whether stable or variable it shall provide for the maximum production and distribution of goods and services desired by the community. The difference in the point of view can be simply stated. The principle at the root of all technical methods used by the banking system is that money is a commodity, which can be bought and sold like any other commodity, and the output ot which can be controlled by a trust which fixes the conditions of sale. Under these circumstances, money as a medium of exchange must be subordinated to money as a standard of value, thus the Central Banks watch the figures being piled up in their books while the nation is being condemned to privation in a midst of potential plenty. The value of money and of all commodities can bo enhanced by restriction of output. The greater the artificial scarcity, the higher the price the public will pay for what it is permitted to receive, even to the price of its independence, its individuality, its soul. By the passing of such a measure as the Reserve Bank Bill, sponsored by the Coalition Government, this Dominion will be forced to submit to this domination for a period _ of 25 years. Notwithstanding the stifling ot public discontent, it is remarkable that tho gathering murmur of protest has not been heard much louder before this. The source out of which banks make loans is not the savings of the banks,, but the credit of tho public. The._bu»ks,. truly have had tho use of the public credit over a long period of years, as a matter of custom only; but surely the people of New Zealand are not going to hand over their birthright to foreign control for a fixed period of 25 years.—l am, etc., r "HOPEFUL.” Palmerston North, Aug. 31.