CURRENCY AND DEPRESSION

Otago Daily Times, Issue 24254, 23 March 1940, Page 19

CURRENCY AND DEPRESSION

VO THE EDITOB Sir,—" Truth" makes an undue assumption when he ascribes the recent world-wide depression to deflation of the currency. He forgets that sbout half a century ago there were soup kitchens in Dunedin. In those days the Government relieved unemployment on railway construction in Central Otago and in the Catlins district. At that time there was neither inflation nor deflation of currency. And for many years before that the world had been accustomed to regular cycles of prosperity and depression Already we resd of business men who have much to lose discussing means of protecting themselves from the slump which they expect and fear after the present war. They know from experience that the speeding up of production must be followed by glut and stagnation as soon as the demand has been satisfied. " Truth" must acknowledge that, as the recent depression wss only the worst of many depressions, deflation of the currency cannot, be the root cause. The cause lies deeper, in the very mechanics of our present economic system, and no remedy will be found in any monetary changes whatever.—l am, etc.. H. Gow. Balclutha. March 20.