ECONOMIC PLANNING

Otago Daily Times, Issue 22612, 2 July 1935, Page 5

ECONOMIC PLANNING

TO THE EDITOR

Sir,— Mr Sivertsen’s valuable letter in this mornings papr claims the closest attention of all who have an intelligent interest in the economic problems ot the day. He makes it clear, I think, that this Dominion of ours has power only to control our own prices and values and no power to control prices outside ot the State. If this .be granted, then, the first question that arises is; What controls the price of labour? As the price of the currency standard is the price of its labour value, it follows that the standard of value is the price of its labour content, so whatever standard price is fixed for labour fixes the standard of value or, in other words, the standard of living. That the price of labour can only be controlled if the State adopts a currency of its own seems to me to be clear. If we adopt the gold standard and raise the price of gold, then all other commodities, as well as labour, are raised in price. Whether we adopt the gold standard ourselves or adopt the sterling currencies of other countries, gold is ultimately the world’s standard of value to which all other currencies must be adjusted.. So, by not going beyond our own borders for our currency, we are pursuing a safe course, and so long as our price of gold is as high as, or higher than, outside prices there can be no tear of an outside run on our gold assets. Further, when the balance of trade is to be corrected, it is balanced in gold irrespective of price, and the higher the price the less gold is required to establish a balance. Therefore, I submit, it is in New Zealand’s interest to adopt a gold standard currency of its own. —I am, etc.. Measure of Value.