POLITICS AND CONFIDENCE

New Zealand Herald, Volume LXXII, Issue 22300, 24 December 1935, Page 15

POLITICS AND CONFIDENCE

Sir, —May I thank "Cambist" for his thoughtful criticism of my statement, "New Zealand money is entirely her own business, and does not concern people outside." In agreeing that this may be, however, "Cambist" seems to imply that our currency must be subject to external dominance, because we export, import, owe debts overseas, indulge in travelling abroad, and entertaining visitors from other lands. The point which needs to be emphasised, and which indeed is frequently overlooked, is that we do not, and cannot use New Zealand money outside our own territory. Our exports are sold abroad, our imports are paid for in foreign currency, and our overseas debb in the same medium. It is for us to so manage our currency that it will enable us to distribute our wealth of goods and services in New Zealand, and our money could be almost entirely cheques if we knew tho business better. If our currency differs from British currency standards, we are not the less able to pay debts in Britain if we have the common sense to provide ourselves with sufficient New Zealand currency. There would have been no hardship in the present high rate of exchange, for instance, if we had taken the precaution to raise wages, incomes and prices to. the now level. "Cambist" seems to insist that values or prices in New Zealand must be measured by foreign values. Surely tho prices we arrange, for goods and services in New Zealand are entirely our own business, and the foreign price of our exports has really no reference to their cost in New Zealand money, which alone should fix in New Zealand the prices of our imports. It is obvious that our imports cost us in New Zealand money a great deal more than the same goods would cost the people in Britain. If this is true, then we must provide a great deal more New Zealand money to enable their consumption. There is no hardship in increased monetary cost of living if wo provide currency accordingly. Peter Mellob.