THE CURRENCY QUESTION
Sir, —I have read with interest the many articles on currency reform, but they all overlook the essential point, and that is the national currency is the national share capital, or currency is to a nation what the share capital is to a company. The only reform necessary, and time will prove it compulsory, is to treat our currency in the same manner that a company in trouble averts the same conditions. Say a company with a 10,000 share capital takes stock and has its assets valued at current values and finds it can only show assets for 5000. The company recognises the necessity of reducing the capital to 5000 so that it can be backed by sound assets and. of course, the shareholders have to face the loss of 10s in the pound. Now exactly the same result is represented by currency and when the money borrowed (share capital known as bonds) cannot be backed up by tangible assets at presentday values, the only way to solvency is to write down the share capital (currency bonds, mortgages, etc.), and the easiest way to do this is to get back to the gold standard by making the sovereign the equivalent of the shown assets. So' instead of the sovereign having 113 grains of refined gold reduce the quantity of fine gold to 56£ grains. The effect of this action would be to immediately raise the values of commodities and wages and reduce the value of fixed charges, bonds, mortgages, etc., and as nearly all bonds and mortgages were made> when the currency was practically on the 56£ grains ratio and by the present deflation they have been receiving an unearned bonus, they have little to complain about. As it is the payment of the interest on this unearned bonus of bondholders that is causing the present unemployment and depression throughout the world, the saving of same would enable the world to get back to sound economical conditions. The greatest benefit to bo derived from this system of inflation would be that after careful stock-taking as to values and arriving at tho exact amount of inflation required to place us in a normal position the whole currency is safely held by a golden anchor. H. Parkinson.
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https://paperspast.natlib.govt.nz/newspapers/NZH19321125.2.174.11
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New Zealand Herald, Volume LXIX, Issue 21349, 25 November 1932, Page 15
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378THE CURRENCY QUESTION New Zealand Herald, Volume LXIX, Issue 21349, 25 November 1932, Page 15
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