PAPER MONEY.

New Zealand Herald, Volume LXIX, Issue 21164, 22 April 1932, Page 12

PAPER MONEY.

g; rj It is difficult to see _ what the Civil' Service thinks it. js going to get from the "policy for which it is pressing, the printing of Treasury notes. I see what the unemployed gain, work at good money at least temporarily, and as the future docs not and never has troubled most of them, they will no doubt be satisfied. But for the civil servants the case is different. With inflation, that is, the printing of more money, pricos will inevitably rise. A man on a salary is the worst loser by rising prices. If a salary of £4OO can buy only as much as a salary of £3OO, the rise in prices is equivalent to a 25 per cent. cut.. Also the benefit of Treasury notes would be confined to the towns and cities and | therefore short-lived. There would be no more wealth in the Dominion. It would bo the old story of living by taking in each other's washing, only at higher laundry rates. There would bo a short boom followed by a longer and more disastrous slump. If, on the other hand, the clamour were for a free exchange, and if the exchange rate should rise as is anticipated the immediate effect would be much the same, except that instead of the money going first through the hands of the unemployed it would go first through the hands of the farmer and so would stimulate tho production of more wealth, which would in turn bring more money into circulation. Beside it would make the taking up of land more attractive proposition. The great, the only cure, for New Zealand's slump is land settlement. Yet how can tho Government settle men on the land when those who are experienced farmers cannot make the land pay ? The problem, then, is how to make the land pay. Obviously wo should so arrange j things that tho attractions, benefits and profits offered by farm life compare

favourably with thoso offered in town. Then a man who has had his salary cut and knows perfectly well that there is small chance of restoration because every department must for many a year contract and not expand,-which means that not only is tho present made difficult to him, but his prospects have vanished, looks round for something more hopeful to do. If tho land holds out enough inducements he chooses, that and thereby not, only benefits himself, but renders a double service to the community. First, ho eases the stringency in his department. by withdrawing and leaving room for others, and, secondly, as a farmer he helps to produce tho wealth by which the whole community lives. Every man, woman and child in the Dominion is the better for his effort. Let this happen on a, large scale and the slump is over. If then the only road to prosperity lies in making the laud a payable proposition, let. us bo careful to move in that direction. The bad times have forced the first, step upon us. They have stopped the drift, to the towns. Farmers' sons who have been in town earning wages that, made them despise their father's vocation are now out of work and back on the farms. Prosperity brought about by inflation would send them hurrying citywards to sell cars and radios and jewellery to tho no longer unemployed. Thus this first step would be lost. A certain amount of deflation is absolutely necessary. The standard of living set. by fhe towns has, for the past, ten years been quite out of proportion to the productiveness of the country and so cannot, bo permanent, I tnahilain, now that some equilibrium has been painfully brought, about, that the civil servants would he better advised to clamour, not for a Treasury note issue, but. for a free exchange. That advantage to the producer, together with some judicious expenditure on rural facilities—education and medical; some easing up of burdens for hospitals and high roads, and the interest, reduction already being debated, might, at not so distant a date, start a drift back to the land and at tho same time a drift bfiek to prosperity. Helen Wilsom.