FINANCE

Te Aroha News, Volume XLI, Issue 6546, 20 November 1924, Page 5

FINANCE

MONETARY REFORM From a book with the above title, by Professor Keynes, we are publishing the following suggestive extracts: “When the value of money is greatly fluctuating the distinction between capital and income becomes confused. It is one of the evils of a depreciating currency that it enables a community to live on its capital unawares. The increasing “money” value of the. community’s capital goods obscures temporarily a diminution in the real quantity of the stock.” “What the Government spends the public pay for. There is no such thing as an uncovered .deficit. But in some countries it seems possible to please and content the public, for a time at least, by giving them, in return for the taxes they pay, finely engraved acknowledgments on water marked paper. The Income tax receipts which we in England receive from the. Survey or, we throw into the waste paper basket; in. Germany they call thfem bank notes and put them into their pocket books; in France they are termed Rentes and are locked up in.the family safe.” . “Confidence in the future stability of the value of gold depends on • .the United States being foolish enough to go on accepting gold which it does not -want, and are wise enough, having accepted it, to maintain it at a fixed value.”

“Advocates of the ancient standard do not observe how remote it now is from the spirit and the requirements* of the age. A regulated non-metaliic ’« standard has slipped in unnoticed. It exists. While the economists dozed, the academic dream of a hundred years, doffing its cap and gown, clad in paper rags, has crept into the real world by means of the. bad fairies — always so much more potent than the good—the wicked Ministers of Finance.”

Financial principles are quite- different . from those which ruled ten years ago. Because freedom to export gold does not exist; because the free coining does not exist; because all the springs of liberty are lacking;' so that it has been necessary to devise a special system in each case, a' science of finance. It is not sufficient to throw gold on the market to cause the rate of exchange to fall. You might throw 40 or 50 millions, in gold on the market to-morrow, but the value of the dollar would remain unchanged. To-day money does not signify any fixed relation with any other money;, it simply signifies purshasing. power —the purchasing power which emanates from the credit possessed by the individual, the community or the Nation which issues it.—Argentine Minister of Finanre. .