GOLD AND ITS WORK.

Taranaki Daily News, 30 November 1932, Page 3

GOLD AND ITS WORK.

! (To the Editor.) Sir, —The early pioneer had very little gold, and nothing in sight but a home for himself and his family. Consequently he had to become a producer. This he did, and amongst themselves the pioneers worked a very humble system of barter. They carried it into their dealings with the business man, receiving food and clothing in return for produce. By sheer toil and thrifty management the pioneers were able to produce in time more than they needed for their own use and. the working of their land. At this stage coined gold became the competitor in the system of barter as a medium for accounting for overproduction. The pioneer actually bartered for what he required—food, clothing and the necessaries to work his place. The over-production in his favour could not be held indefinitely. Gold was therefore welcomed as an exchange for such over-production. Gold, therefore, had no more value than what it replaced. It rested in some secluded spot, and played no further part in the progress of the country. Evolution brought along ideas that this gold accumulating from over-production might do something for posterity. At this stage gold promoted itself from being a medium of barter and was used to bring the future to work hand in hand with the present. Gold therefore became a producer, or in other words the pioners’ over-production began to incur overhead expenses that the producer did not anticipate when gold was introduced as a medium of barter. Increased production has not helped the producer, but has brought him burdens that have deprived him, of his accumulation of gold. Barter “lived for the day,” but gold saw to-day, to-morrow and years to come. It carried the pioneer years ahead

himself, and mortgaged his over-produc-tion for years to, come. • The primary producers to-day say that the increased cost of production is their stumbling block. If so, then increased production introduced a competitor that helped to bring about this stumbling block. It dealt, as it were, with-the future before they were past the P re " sent. Over-production ■ hand in hand with gold outgrew itself. What has this friend of barter, gold, done for us? Nothing! A number of the very places throughout the Empire that produce gold in its raw state have just met in conference with the people that kept its standard value to try to re-introduce it as a medium of barter, asserting itself under the heading of “trade balances” between producers, Empire and dependencies. Trade balances take the'place of pioneers. Gold and its introducer, overproduction, have through the medium of posterity had their fingers on trade balances. In 1931 the trade balance between the British markets and the Dominion amounted to £26,000,000 in favour of the Dominion, the debtors being the purchasers of the Dominion’s producers. Credit was given, to the cost of posterity, in interest to the Bank of England. Had that large sum of money circulated throughout the Dominion it would have paid endless debts, employees, etc., before again finding a resting place in the Bank of England.What can be done by circulation may be instanced from the following example: Brown owes Jones £5. He issues a cheque for £5. Jones cashes that cheque. It is immediately debited to Brown, but the £5 may travel from one end of the Dominion to the other paying debts before it again finds a credit in the resting place or bank. Jones owes his grocer £5. He passes on the £5. The grocer owes the merchant £5. He passes it on. It is still the same £5 that a cheque -let loose, yet it has satisfied debts amounting to £l5, and so it could go on indefinitely as long as it remained a .debit, but as soon as it found a credit, or resting place, it loses its value in circulation, just as that trade balance of £26,000,000 was a debit to the purchasers of our produce. Without its circulation satisfying anyone it: found a credit in the Bank of England against the interest posterity owes to gold. The circulation of £26,000,000 would have satisfied the debt of every producer in the Dominion, paid wages to every labourer during its circulation, then found its way to credit of the New Zealand Government in the Bank of England.

Let us go back to the pioneer. He had little or no need other than what he could satisfy by a humble system of barter until the suggestion that posterity might help him appeared on the scene. It pushed him as it were years ahead of the times, pushed solidity off its feet, introducing burdens years before their time. They did not crawl before they began to run. The pioneer took a hand in the government of the Dominion through the medium of local bodies, and further up the ladder in Parliament, he carried this idea of what could be done by posterity with him. Posterity has allowed nothing for depreciation, having no reserve fund. Its original cost is with us to-day, to-morrow . and ‘ every day, until gold has satisfied its claim. Had 1 producer, local body and Government left posterity to its. day its invested cost' in circulation would never have allowed depression and unemployment to thrive in this country. They are the disease of posterity (gold having found its resting place years ahead of progress, its circulation is stifled. To follow a marked sovereign to-day through its channel of circulation one would soon be confronted with some London money-lender’s ■ pocket). Posterity through the medium of borrowed money harbours the cure for depression and unemployment. It was going as far as dictating the Empire’s future until England realised she was keeping up a. standard value against a yearling diminishing asset. Gold lost its commercial equity when it decided to build the future past the present. ; ; . The future is fast approaching. Will posterity be able to hand tis the asset our over-production aimed for? ’ No! The asset will be obsolete. Development of communication saw deep-sea cables carrying messages from the homeland to the Dominion. To-day they are conveyed through the air. Wireless is fast making everyone his own postmaster. Then why build post offices for posterity? Motor transport makes everyone his own stationmaster. Then why build railway stations for posterity? We-yet have to appreciate where over-produc-tion, through the medium of gold, has led us in our desire for wealth. We have sold for gold what gold can never buy. The ladder of fame is climbed only'one rung at a time. Likewise the ladder to posterity offered one rung. But gold brought the top back to meet the bottom,, and between the two lots of rungs the middle is crumbling, causing depression and unemployment. —I am, etC ‘’ - P. MORA. Whangamomona, November 28.