TRADE AND MONEY

New Zealand Herald, Volume LXX, Issue 21470, 19 April 1933, Page 14

TRADE AND MONEY

Sir, —In dealing with Douglasism ons is not required to explain all that is wrong in our economic organisation and policy; it is sufficient to show that Douglas is wrong. It may be pointed out, however, that unbalanced production, changes in taste and fashion, and new inventions must always make it difficult, or even impossible, to sell particular goods. Tariffs and other restriotions on imports have, however, in recent years, caused most of tho difficulty in selling output. Ireland now finds it impossible to sell her produce and stock because tho market her industry is organised to supply has been partially closed against her. If any man believes that an issue of paper money would reopen that market, what can we think of his judgment? If that same market were closed against us, tho sale of our stock and produce would bo impossible, and we should certainly b e ruined beyond remedy, nor would tho circulation of train loads of, paper money delay our ruin bv an hour. If any man will consider for a moment th& extent to which, during the last three years, imports have, by almost all Governments, been taxed, limited and prohibited, ,he will have no difficulty in understanding why, in so many countries, works, organised to supply the world's markets! finding those markets closed against them, have been compelled to close down, or work part time. So far from want of money beisg the root of these troubles, . the world, in all ifcs history, was never so glutted with money as it has been since the war. It was, in fact, the monstrous inflation indulged in, with the deflation inevitably following it to bring prices to a sane level, that so disorganised business, diminished employment, and demoralised exchanges that Governments were driven to make frantic efforts to reduce their imports. Every cut in the imports of one country involves an equal cut in the sales of* other countries, and so the ruinous process has worked with the disastrous results we now see throughout the world. If to these facts are added the monstrous war debts, made far more monstrous by the fall in the price level and the unprecedented level of all Government and labour costs due to inflation and borrowing, we have a reasonable and adequate explanation of present abnormal _ Manurewa. J- Johnston's.