THE BANKING SYSTEM

Otago Daily Times, Issue 22631, 24 July 1935, Page 6

THE BANKING SYSTEM

TO THE EDITOU Sib, —The timely address by Sir James Grose, at the meeting of the Dunedin Chamber of Commerce last night, has its value ftom the point of view of an expert banker: Sir James certainly makes out an unanswerable case in defence of the bank’s present systems of issuing credit on its own securities and that of its clients. What the banks’ privileges are under the law were not touched upon. The greatest and most far-reaching privilege of all is the privilege of fixing the standard of value which ultimately rests on the price paid for gold. It would not be necessary to nationalise banking if gold could be bought and sold like other commodities. It is the price of gold that fixes the prices of labour and its products, including the assets upon which sterling currencies are built up. Sir James Grose is evidently a believer in the present policy of devaluing the securities of land and labour, thus forcing a curtailment of credit. It would be interesting if he could show us how he expects the country to get over the depression by these means. I am a believer in the opposite policy, and to attain that end all that is needed in my humble opinion ig to raise the price of gold to the level of other inflated prices—say, £8 per ounce.—l am, etc., Measure of Value. July 23.