“SOUND MONEY"

Northland Age, Volume 3, Issue 14, 5 January 1934, Page 7

“SOUND MONEY "

WE in New Zealand know how very effective is the use of a catch phrase. We have seen a clever combination of words lift a commonplace politician into high place, and have witnessed real ability submerged in our public life by having a catch word or phrase tagged to its possessor’s name. In the interminable discussion on the money question, the catch phrase “sound money” has run neck and neck with the words "inflation” and “deflation” in the fool’s vocabulary for first place. It has figured prominently in the cables regarding the great and daring experiment undertaken by the President of the United States, it shows up in newspaper articles that smell strongly of propaganda, and in certain “letters to the Editor” in the daily press it is trotted out as a clinching argument

against any alteration in the present monetary system. But what does it mean? Certainly not what nine people out of ten who use it think it does. It has only as much real meaning attached to it as a little while ago “bolshevist” and “red fed” had. It is a catch phrase cunningly hurtled through the air or over the cable by people who know it has no meaning in itself but who were well aware that it would be a most useful combination in the verbiage of stupidity. “Sound money” cannot be defined in itself. It depends on circumstances. Money is sound only if it is facilitating the maximum and most equitable exchanges of the goods and services produced by a community. For money is a medium of exchange and nothing more. If it ceases to act as such, it is not sound, no matter whether it is gold, silver, or paper.