FUTURE CURRENCY

Te Awamutu Courier, Volume 79, Issue 7138, 28 November 1949, Page 5

FUTURE CURRENCY

CASE STATED BY NEW GROUP SOME PROMINENT SIGNATORIES / A new approach to the currency problem within the sterling area is outlined in a memorandum sent to the leaders of the Labour and National parties last week. Thirty-three signatories include such well-known people as Mr William Goodfellow and Dr H. A. Cunningham (Auckland), Messrs Robert Harding and T. C. Lowiy (Hawke’s Bay), and David Ewen and G. K. Hansard (Wellington). The memorandum is from a movement known as Christian Action, which takes the view that the pressure on sterling and on Great Britain demands that the British Empire and Commonwealth should mobilise its currency and credit resources in a British currency and credit union. In a covering letter, Christian Action said the memorandum “indicated a viewpoint regarding the gravity of the dollar-sterling situation in order to emphasise the need for the greatest care and regard for principle in the management of our own currency and credit.”

The signatories therefore asked for an assurance from the two party leaders that their party, if elected to govern, would, within three months of the convening of the next Parliament, bring down legislation to give effect to the party undertakings to stabilise the purchasing power of money in New Zealand. Reference to Divine Law

Giving reasons for instigating this action, the letter said that Divine law placed an obligation on rulers to provide “perfect and just measures,” and the signatories were concerned to advocate the application of Divine law. The sovereign right and duty of providing and maintaing a “perfect and just” measure of value, they suggested, implied the delegation of the duty to a properly constituted authority appointed by law; provision of principles of management translated into laws for the instruction, guidance and limitation of the powers of the authority appointed; binding of the authority by law to carry out the appointed duties in accordance with the law; penalties for failure to comply with the law. “We are not concerned with party issues in this matter,” the letter went on. “We assume from the published statements of both parties that each agrees that some statutory authority should be appointed and that defined principles guiding and limiting the Powers of that authorjty should be incorporated in appropriate laws.”

Well-known industrial and commercial leaders, or their advisers, had been asked to sign the memorandum because the question of a stable price level was to them a daily concern, said the letter. Concern For Britain

Many thought the drastic devaluation measure would bring Britain to prostration, said the memorandum. If it did so, Britain would have to seek more dollar aid or accept “cuts” which would further react upon every economy, in the sterling area and might well precipitate a world slump. “A strong body of authoritative opinion supports the view that prostration will drive Britain back to seek more U-S.A. aid,” it stated. “In that event the terms of the aid may well be: (a) liquidation of Empire preference, or (b) liquidation of the sterling area. Should these conditions be imposed, we may see the beginning of the end of the Empire as an economic entity and of Britain as an international banker. The consequences to New Zealand’s young industries may well be disastrous. “Surely the supreme question is: How can sterling be strengthened and its purchasing power be stabilised? Does not the answer lie in the restoration to the Crown of the sovereign right of control over the creation of currency and credit on the principles of maintaining a stable price level? The eventual establishment of a British currency and credit union to this end would bring the whole Empire strength behind sterling-” As “essential first principles” the movement suggested: (1) That sterling be a managed currency on the above principles. (2) That all nations within the proposed union adopt the same criterion of management so as to give united, stability. (3) That the objective - and guiding principles of the monetary policy of the New Zealand Government be to establish and maintain a stable price level and that the necessary legislative direction be given to the Reserve Bank.