Chasing a Shadow

Manawatu Times, Volume 60, Issue 175, 27 July 1935, Page 5

Chasing a Shadow

Monetary References In Minsterial Eyes

HON. A. HAMILTON BELIEVES IN PRESENT SYSTEM!

Per Press Association. INVERCARGILL, Last Night

‘‘Discussions of tho monetary system arc much in evidence at tho present time. Many different systems have been and still arc being advocated by monetary reformers as being preferable to the well-tried existing system,” said the acting-Alinistcr of Finance, Hon. A. Hamilton, in the course of ait address to tho Southland Provincial Executive of the Farmers’ Union to-day. ‘‘.Because the present system is not working perfectly, so-called reformers advocate that some other system would work and servo people better. So far, I am bound lo say that none of those advocating a change of system has been able to inspire confidence in those experienced in this subject and responsible for its operation and convince them that there is a better system than the present one to-day. Great Britain appears to have adopted the soundest of all monetary systems and is managing her money in relation to both gold and goods. Britain’s pound sterling is at present linked to gold without a fixed gold value. The valuo of her pound is determined more on tho price level of goods. Britain has aside many millions of pounds as a secret fund to maintain her pound sterling at an agreed upon amount. Since Britain went olf the gold standard her pound has depreciated very materially in terras of gold but remains fairly constant in its purchasing power of goods. This appears to be the most practical method of handling any monetary system. Indeed, this is New Zealand’s policy and wliat many of tho so-called monetary reformers arc advocating is already being done. “In these days we hear such expressions as ‘Costless credit’ and ‘an issue of credit’ and we arc asked to believe that money can bo created. These aro pleasant phrases but I would bo sorry to think that our people would be misled .into believing that our problems could be cured by any of these methods. lam afraid that if any of these methods were practised the consequences would be disastrous.

“We aro told that there is not enough currency and that currency should balance goods and services and that adherence lo gold as a standard for money is a barbarous relic. What we have to be careful of is that wc don’t throw away a reality for a shadow. Money must represent something real, something that is a physical reality. Credit is built upon security and confidence. W’e are living in a practical world and wc must face practical realities. Pleasant and easy methods usually fail in the end.”