QUANTITY THEORY OF CURRENCY

New Zealand Herald, Volume LXX, Issue 21561, 4 August 1933, Page 13

QUANTITY THEORY OF CURRENCY

Sir, —Will your correspondent "Cambist" show hoAV gold, which ho says is "for all intents and purposes of this subject nothing more than a primary product," is not subject to the law of supply and demand. Also, will he show how a variation in the quantity of gold and the note issue based thereon does not influence currency. "Cambist" quotes a credit bill in America to prove that more currency or credit does not always increase prices, but surely he does not ignore the effect in many European countries over the past decade, when inflation caused the prices to soar well out of §ight of the workers' wages. He has shown that there must be immense influences at that greatly interfere with the supply and demand, but does he maintain that gold, credit and notes are not subject to the law of supply and demand at all? I think the time is long overdue for an open inquiry into the credit and currency of this country by competent representatives of the people, and an endeavour to (1) stabilise the purchasing power of the New Zealand pound; (2) control money by Parliament, instead of allowing money to dictate which measures shall be financed and which crippled, i.e., ruling Parliament. , Inquiry.