STATE BANK.

Poverty Bay Herald, Volume L, Issue 16458, 17 June 1924, Page 6

STATE BANK.

(To the Editor of the Ilorald.) Sir, —I have to tliaiik , “Eeoiioniist" for the very little and kindly criticism he has offered to my letter of Saturday last. He has (perhaps unwittingly), paid me the highest compliment he could have done, in that lie says “that to discuss my suggestions fully would require quite a treatise on economics. - ’ This a great compliment to the edifice I set up. Now, sir, “Economist’ must have read that letter very carelessly, or lie would not have charged me with any desire to bolster up land values, for 1 said “a fair margin of security,” and as to Iris reference to “inconvertible paper,” I proposed no such thing. What I said was “that the holders of this currency could buy and sell all marketable commodities with it.” Then the reference to local finance becoming international currency, 1 thought, was plain enough. It is this : The note issue of a private bank is only worth its face value in the country in which it is issued. In any other country that note or paper is at a discount, hut supposing those notes are turned into wool, mutton, butter, cheese, etc., in the place of issue, these products are not “inconvertible paper,” but are convertible into gold or its equivalent internationally. Not only are my theses correct, but the deductions are also correct. Of course, none of your readers need to be told that the banks are not. philanthropic institutions. They have, learnt that by sad experience (some of them at least). There should be something like equality of sacrifice. But bankers and financiers have become sleeker and fatter, while good, honest farmers and business men have gone down and out. and it is not so much the fact of land inflation ns money inflation, the cruel interest rates causing the high cost of merchandise and resultant high cost of living. Of course, I do not want to give “Economist” too great a shock, but my system would give us in n very few years a practically tax-free country in which to live.—Yours, FRANCIS STAFFORD.