BASED ON PRICE LEVEL

Taranaki Daily News, 27 July 1935, Page 9

BASED ON PRICE LEVEL

CURRENCY OF BRITAIN SAME SYSTEM IN NEW ZEALAND. REVIEW BY HON. ADAM HAMILTON. “EASY METHODS USUALLY FAIL.” By Telegraph—Press Association. Invercargill, Last Night. “Discussions -,of the monetary system are much in evidence at the present time and many different systems have been, and still are being, advocated by monetary reformers as being preferable to the well tried existing system,” said the acting-Minister of Finance, the Hon. Adam Hamilton, in the course of an address to the Southland provincial executive of the Farmers’ Union to-day. “Because the present system is not working perfectly so-called reformers advocate that some other system would work and serve people better,” he added. “So far I am bound to say that none of those advocating a changed system has been able to. inspire confidence in those experienced in this subject and responsible for its operation that there is a better system than the present one. > “To-day Great Britain appeal’s to have adopted the 7 soundest of all monetary systems and is managing her money in relation to both gold and goods.. Britain’s pound sterling is at present linked to gold without a fixed gold value. The value of her pdund is determined more on the price level of goods. “Britain has put aside many millions of pounds as a sacred fund, to maintain het pound sterling at an agreed Upoii amount. Since Britain the gold standard her pound has depreciated very materially in terms Of gold but iemains fairly constant in its purchasing power of goods. This appears to be the most practical method of handling any monetary System. NEW ZEALAND’S POLICY. “Indeed this is New Zealand’s policy and what many of the so-called monetary reformers are advocating is already being done. “In. these days we hear such expressions as ‘cbstlesS credit’ and ‘an issue of credit’ and we are asked to believe that money can be created. These are pleasant phrases but I would be sorry to think that Our people would be misled into believing that our problems could be cured by any of these methods. I am afraid that if any Of these methods were practised the consequences would be disastrous. “Wo ate told that there is not enough currency and that currency should balance goods and services and that adherence to gold as a standard for money is a, barbarous relic. What we have to be Careful of is that We don’t throw away the reality for a shadow. Money must represent something real. Credit is built upon security and confidence. “We are living in a practical world and we must fete practical, realities. Pleasant and easy methods usually fail in the end.”