REPLY TO "ENLIM."

New Zealand Herald, Volume XXIV, Issue 7921, 13 April 1887, Page 3

REPLY TO "ENLIM."

TO THE EDITOR. Sib,-— must lodge a mild objection to "Enlim's" remarks on my criticism of one of his papers. He complains that my letter is totally irrelevant to the subject matter of his article. That is one way of getting out of it. I submit, nevertheless, that a few remarks explanatory of the ebb and flow of mouey to and from the colony can hardly be out of place In considering the question of " keeping the money, in the country." He says that he "never even hinted that there was no such thing as money," but it is not even now too late for him to discover that this is the only logical conclusion from the premises he advanced. He maintains his position was not intrenched on by my letter, and he is quite entitled to the benefit of his opinion. Briefly, his argument was as follows There are some ignorant people who talk and write about keeping the money in the country, as if we sent sovereigns In exchange for our imports, and received sovereigns in return for our exports. In no instance is there any money used in settling for imports and exports; therefore, however large or small the imports or exports may be, there can be no drain of money from the country. In his last paper, "Enlim," strongly recommends the study of Adam Smith and Professor Fawoett. Now, political economy does not stand still, and these writers, good and sound as far as they go, hold opinions which, in some instances, may be q\iite out of date, and inapplicable to the conditions existing in a young colony. However, as these are '' EnlimV authorities, listen to them. " But when one (country) imports from the other to a greater value than it _ exports to, that other, the former necessarily becomes indebted to a greater sum than the latter becomes indebted to it: the debt and credits of each do not compensate one another, and money must be sent out from that place of which the debts over-balance the credits [Wealth of Nations, book iv., chapter iii.] When it is said that exports and imports must be equivalent in value because a country pays for her imports by her exports, it is taoitly assumed that a country has to make to foreign countries no other payment except

for the commodities she imports. Again, " When one country has incurred pecuniary obligations to another, the indebted country must send .more goods to the nation from which it hits borrowed, than it receives In return, i.e., its exports mnefc permanently exceed its imports from that conntry.M [Fawcett's Political Economy, pages 397 and; S, 4th edition.] I may say that I cordially agree with " Enlim " when he remarks in hie last article that "a person undertaking to instruct the industrial olassos, should bo well with the principles of political economy, and should. have an intimate acquaintance with the writings of Adam bmith or Professor Pawcett," to which I : may add that it would be advantage that each an instructor should aleo understand the authorities he quotes.—l am, &0., "--"-■'■ , Q.E.D.