THE MONETARY CONFERENCE

Otago Daily Times, Issue 25589, 17 July 1944, Page 6

THE MONETARY CONFERENCE

Sir,—Two significant features of the postwar world as planned by the financial experts now at work at Bretton Woods are to bo observed in to-day’s news. Mr Nash reports to Mr Sullivan that "in any case it will still be necessary to guard against the danger of some countries imagining that they will not have to balance their accounts or pursue other sound domestic policy.” Now who is to say what particular variety of domestic policy is sound? Evidently “ the fund ” is to be the dictator, that is to say, those who control the fund: and they are to have an efficient information service—it would be a pity to call it a spy service. “ Discussions are now taking place,” Mr Nash goes on, “ with a view to ensuring that the fund will be supplied with all the information and statistics from every country, so that the whole world financial situation may be brought out into the daylight.” In a word, the international financier is to know all about us and to dictate our domestic policy as well as arrange our external trade—if he permits us to have any. This is just the kind of thing which, after last war, ruined Austria and created the conditions in Europe out of which Hitlerism arose. As for the war for freedom, we might remember that Edmund Burke remarked that, without the people retain their sovereign rights over money, “ no shadow of liberty can subsist.” Mr Nash, of course, does not object on behalf of New Zealand because, according to the official spokesman of the conference, the fund’s recommendations will "not be directed at such Internal measures as social security or rapidly rising wage, cost and price structures due to the economic effects of strong Labour Governments.” That is to say, the present trend to crush out independence in the individual by crushing taxation and by regimentation will be condoned or encouraged as quite in line with the programme of the Work State, which is equally dear to the heart of International Finance and the Labour politician.—l am, etc.. Truth. Dunedin, July 13. Sir,—Lord Keynes’s statement that the gold based international fund was controversial, but was so much better than any alternative presented, will give “ Truth ” and F. R. H. something to ponder over. Lord Keynes will have probably read everything of value written about central banking as well as the book which “ Truth " recommends me to read. Surely the whole story that Alberta could tell has been heard at Bretton Woods. To say all these men hold briefs for the banks is as ridiculous as l the inference that I do, because I believe that if the country followed the path “ Truth ” suggests it would only lead to further muddle. The Maori’s cheque book system, of finance would not hurt the banks. The banks would certainly be on the inside running when the central and sole creditgiving authority was established. If the Government took them over at valuation for their assets bank shares would jump like those of the Westport-Stockton Company. F. R. H. fears that the suggested gold standard is too restrictive for full scale production, and that is possibly true if doing all our own work inside the confines of our own country is an ideal. But I believe the big steamers and the transport aeroplanes after the war should be busier than ever. To bring this about we need a currency that either has international value in Itself or represents iL—not merely a ticket that a local policeman says is legal tender for a debt, but is valueless when you -get beyond his beat.—l am, etc.. Miner.

Sir,—Miss Gow reminds me that gold Is still being dug out of the ground, and she might have added more usefully that it is still being put back into the ground in the form of bullion, which cur financial pundits, at the present stage of enlightenment, insist on regarding as real wealth. They write figures in books to symbolise its value and demand permission to use it as the standard for measuring all other values, although its real value is less than nil, for it is practically a useless mineral that costs much labour to mine, assay, store in vaults, protect, and symbolise—all of which must be added to the prices of real commodities. The book value of this bullion is said to be based upon its labour cost, but is really only an arbitrary symbol which is both ductile and contractile in response to financial jugglery, and mysteriously imparts the same properties to the values of all the' other commodities and assets It measures. Unless enlightened public opinion is strong enough to veto its reinstatement as the financial standard of value, the post-war era is destined to see a repetition of the dreadful decade of 1925-1935—possibly from 1950 onwards —when the final great slump will surely settle" on the world. Once more behind every enterprise and industry will lurk the shadow of bankruptcy, and again this dark cloud of depression will refuse to be dispelled until the way is opened—forcibly or otherwise —to economic freedom and a new way of life. — I am, eta, F. R. H. Dunedin, July 15.

Sir,—Gold is only one commodity, but inflation or deflation of money can only have meaning in relation to commodities in general, for it is the medium of their distribution. In a highly industrialised State, commodities are not stable. They increase quite often with incredible rapidity. Gold does not, so It cannot be a true measure for the distribution of such commodities. Gold, to have any practical relationship to commodities, should increase as they increase,' or commodities should be duly restricted to the output of gold—lrrespective, of course, of the needs of the people. Then there would be neither inflation nor deflation. Perhaps we might even have the birth rate regulated by the gold standard. Conditions would then be static and would fit in admirably with this standard. War, of course, must be left out of count with its increased activities. —I am, etc., Cromwell, July 14. G. R.