CURRENCY REFORM

Nelson Evening Mail, Volume LXVI, 13 February 1933, Page 8

CURRENCY REFORM

(To the Editor)

Sir, —I humbly suggest the following as the thin edge of the wedge that, lin my opinion, would help Now Zealand on her way, perhaps all the way. The Government to introduce a “Central” Bank, headquarters in London. This bank to have power to issue all notes required for circulation in New Zealand by the Branch Central Bank here. This bank to buy all gold held in New Zealand and transfer same to London, and change it all to sterling. The sterling thus obtained to be invested to the best advantage in London. r Lhe Bank would then issue notes 125 to 100 as per the 25 pei cent, exchange and remit same to New Zealand, for payment of gold bought. (Th e security for these notes would be the invested sterling). AH future gold won by mining companies and miners to be treated in the same manner. Any new loan required by the Government or any local body to be obtained only from Hie “Central Bank”. That the rate of interest charged by the Central Bank be 2’- per cent, with, say, a 31, per cent, sinking fund. That all profits made by the Central Bank be used em tirely to finance the “Small Farm Scheme” until such time as the limit has been reached, then profits to go to the liquidation of our overseas debt or any other important affair. Now let us try and work out what would happen. The 51, millions of gold would sell lor say 8 millions sterling; invested in London at say 31, per cent, (probably more) would mean £280,000 per annum. Ihe million pounds worth of gold obtained by mining companies and miners during the next war would sell for say 1£ millions which at 31, per cent, would mean another £52,500 per annum. Paying the Banks 51, million in notes would leave 2' million for the 'Small Farm Scheme which at 2* per cent, would mean £60,000 more per annum, total on thtse three items £392,000 per annum. Two and a half million pounds spent wisely and quickly on small farms ought to settle 10,000 more families on the land as per the present average of £250 per family and would give regular work to quite a number ot tradesmen and others whilt the 21 millions was be-hi-r spent, and further, relieve the Unemployment Board. Then perhaps the Unemployment Board might borrow from the Central Bank say another millions making a total of 5 millions and '20,000 families'on the land, the security for these notes being the small farms, £5,000,000 worth of small farms as security for 2>, millions of Central Bank Notes. Now an extra' £5,000.000 spent in Hie Dominion would probably be just the little help that is required to case tiie whole position. Imports would increase tn a certain extent, perhaps enough to obviate the payment of any indemnity to the banks; or it tneie should be any surplus sterling m London that had to be bought, the Central Bank in London could buy it and remit their own notes to New Zealand in payment. I don’t see how the trading banks would suffer and it would be better roi New Zealand if the gold lying idle hene were to be pushed out and made to e.tin its keep and ours.—l am, etc., 1 p. DISERENS. Gowan Bridge, Util February.