MONEY TO BURN.

Taranaki Daily News, 1 November 1930, Page 2

MONEY TO BURN.

(To the Editor.) Sir.—The explanation of the term interest in the summary of the National Bank of Australasia, as published in the News on October 20, is only partly correct. Interest in the economic sense means the payment to the o\Vmy for I he use of those assets which constitute “capital.” so it reads. This is only correct if it excludes money. Money, either metallic, or token, does not increase of itself, or ever did. Money is a medium of exchange and used in paying a debt. Interest, if confined to wealth, cither land, buildings, ships, wino, or forests, etc., would, as the bank ways, be a form of rent: but t'he monetary affairs of the world are so mixed up’ with money, currency, exchange, gold standards, credits, drafts, loans at a discount, loans at a premium, renewals, and, last but not least, huge, war debts impossible of being paid, that the ordinary man is in over his head and can’t aee daylight. If Brown exchanged his wealth for Jones’ money, Jonee’ wealth, newly acquired, might, increase. If the transaction was a mortgage, Brown would pledge the whole of his wealth to Jones, as guarantee that he would increase Jones’ wealth at a certain rate. This sort of business is plain sailing, but how money in a bank or a post office or under the bed can increase on its own is a joke. The New South Wales bank a while ago issued a summary, in which it said, “in loan times numerous mushroom economists appear.” Joshua of old complained to Moses of certain unlicensed prophets, but Moses said, “Would to God they were all prophets.” We could do with a lot more interest" fn economies than is apparent to-day, and public knowledge of banking would certainly strengthen the banks, that is the trading banks. —I am, etc., JAMES TUCK. Inglewood.