THE BASIS OF CURRENCY

Otago Daily Times, Issue 22204, 6 March 1934, Page 10

THE BASIS OF CURRENCY

TO THE EDITOR.

Sir, —I have just seen Mr Moss’s reply to my inquiry, but he thinks of cutting out gold, seeing it is based on labour, and making a unit of human energy the bps Of currency, hence my delay in replying. Mr Moss says “he considers it impracticable, he there are no two .persons of equal ability in the world. Now. a* present, this equal ability is ignored, and gold is based on the value of mining labour only plus the still greater uncertainty of finding it in payable quantities or in surplus quantities. Thus we see what a bad basis gold is based on, and the labour involved can only be taken on an average owing to the absence of equal ability. It ik at present competent tor parties to fix minimum and maximum rates of pay, which must work on lorac law of average. Why, then, should it be impracticable to fix a unit of human energy based on an average of the various mostly-used commodities?. This should upset a theory of its impracticability. /It is the present basis of valuing gold, but more complete. Mr Moss says he fails to see “what is wrong in the principle of taking gold as the measure of value and that the trouble is not the gold standard being wrong, but the nations not allowing It to function.” I would say that the fact of. the basis of currency being able to be used as a purchasable commpdity to tb* extent of financiers of any nation being in a position to stop it functioning is, the most damning evidence of its unsuitability. If we had » unit of human Übour -aS a basis this is impossible, because it could not be hoarded or‘locked away in the bowels of the earth and doubled in price of currency ; humanity would not be at the mercy of a commodity scarce in the world or likely to be over-produced as gold is if the intense mining produces unheard-of quantities. It would regulate values on a basis of humanity’s ability and numbers, and would be a permanent basis, unless humanity became extinct, and then there would be no need for any basis, gold or otherwise. Mr Moss also says “we will understand the danger in giving power to any section to increase or decrease the volume of currency.” No need to give the power. It is taken, as, for example, in Britain. Why? Because it was impossible to function on gold. Therefore, that is the best reason in the world to get rid of the basis which failed f so as to prevent a recurrence of the trouble. If we came back to the gold standard it would not be long before all'the trouble would start again, every country vieing with each other to obtain something in short supply plus the manipulation of financiers to corner the metal. I hope manufacturers and chambers of commerce will insist on not allowing a chance of a repetition of these evils, that is, if they have the oppor. tunity to stop a return to gold. It is a false basis and a danger to civilisation, The idea being a new one, comment is invited.—l am, etc., Equity. Wellington.’