THE RESERVE BANK BILL

Otago Daily Times, Issue 22096, 28 October 1933, Page 5

THE RESERVE BANK BILL

TO THE EDITOR. Sir, —Mr Moss in his last letter quotes figures to show that the Act in England of 1844, was superseded by the Act of 15)28 in regard to issuing of notes, and in the first 18,000,000 notes were considered sufficient for circulation, and in the latter 450,000.000 were necessary to the altered times and conditions. How times and conditions change! He carefully avoids* the period from 1914 pre-war to 1933, which were war and aftermath years, and would give some idea of what is necessary in times of crisis. I wonder why. Many of the advanced thinkers in Britain today hold the opinion that the gold standard is useless and unnecessary, specially so when it can be altered to suit ’the whims of national currency. What good is it in America where they are talking about halving the contents of a gold dollar, and in New Zealand we have the extraordinary spectacle of notes being issued on Government credit and a surplus of 12 millions in sterling in London, and our own exchange depreciated 25 per cent, against sterling. In the event of a gold famine, would it not be likely that the gold contents of national moneys would be unreasonably appreciated, and that a gold plenty would act reversely. We have no control over the finding of gold, so why base the life, living, happiness, and well being of humanity on such a basis which must vary according to different happenings, and which can be manipulated at will by the financiers of the world at the expense of the people, body, and soul. Those who control finance hold peoples, countries, and Governments in the hollow of their hands. The idea of thinking in gold terms could soon be overcome just as we havebeen enabled to overcome thinking of the horse as the greatest transport power, kerosene lamps as the highest state of illumination, and Julea Verne’s ‘‘Clipper of the Clouds” as a fairy tale. Paying interest on loans, made on the credit of

the State, to banks authorised to lendwhat they do not have by creating credit, is largely accountable for our difficulties. State credit can be used by the Government free of interest by issuing its own currency, and this is what, we must rectify before we can hope for recovery. The interest we owe Great Britain can be paid only by goods, and if we cannot send sufficient goods to pay interest and-goods we intend to purchase, there muet.be default, because rve have nothing else to pay with. Working on the gold standard has been a distinct failure and our currency system has broken down.' Why not try a new system of State bank and State credit H am, etc., Equity. Wellington.