CURRENCY PROBLEMS.

Timaru Herald, Volume CXXXIV, Issue 18830, 19 March 1931, Page 12

CURRENCY PROBLEMS.

To the Editor of the " Tlmaru Herald." Sir, —My opponent, "Pound Sterling,” begins his latest contribution to the present discussion by asserting that I suggested that a pound weight of silver at one time constituted the monetary pound. The truth is that I made no such suggestion. I did, however, state a solid historical fact to that effect, which was a totally different thing to making a mere suggestion. In saying that Macaulay is accepted as Sterling, and more, he puts himself in the position of the Irishman who contended that the walls of his house were plumb and more than plumb; while he speaks without the book when he claims that Macaulay is accepted by the civilised world, for Prance, Germany and the United States do not accept him wholly, but merely where he pleases them. My opponent next shifts his ground by no longer insisting that Macaulay is an authority on whether or not Governments should in any way interfere with business, or seek to control it in the best interests of the nations; for, he now says that Macaulay’s qualifications were such as to render him a guide to the best model of authority. But, much more than personal qualifications on the part of individual historians is required in order to reveal the truth that may lie hidden in the tangled mass of bygone occurrences. A great deal depends on the nature of things as they find them. And Macaulay himself admits that no historian has yet succeeded in finding the truth, the whole truth, and nothing but the truth, as it may have existed in past times, for the reason, as he himself says: That every source of information has been poisoned by the party spirit. And, we are left to conclude that each historian wrote with a strong bias towards his own party; and as Macaulay was a notoriously strong partisan in his latter years, as always, he cannot be treated as an exception to other historians who preceded or succeeded him. Because he was as reliable as other historians, but, more especially as he was a master of the English language, his works are deservedly popular and praiseworthy, and they constitute my own favourite field of literary browsing. My opponent laboriously but ineffectively endeavours to prove that the British Government erred in coming to the rescue of the national currency, by passing laws calculated to prevent destruction and exportation of the golden guinea, and by taking such other action as was thought necessary in the circumstances tnen prevailing. The position was this: The golden guinea had been, In 1663, declared by law to be worth 21/-, but as it contained more than twenty-one shillings’ worth of gold, the lucrative business of destroying and exporting guineas was carried on by certain business men, greatly to the detriment of the trade and industry of the nation, for the effect of destroying the coinage in this way was to deflate the currency; and deflation of currency always stagnates trade and industry, and creates unemployment and distress; for, unless there be a unit of currency for every unit of produce to be exchanged, some units of produce must of necessity remain unsold, and so business is stagnated. Now, to circumvent the currency destroyers, the Government was advised to withdraw gold from the reach of those criminals, and substitute paper bank notes in lieu of gold. This the Government did; and the business men who had thus been thrown out of action, began to groundlessly complain that paper money was not acceptable to the people. A House of Commons Committee, however, proved that the opposite was the truth, and bank notes began more and more to circulate instead of gold, and trade and industry soon showed a marked improvement. I wonder if my opponent really wishes your readers to believe that those business men who were destroying the currency, and with it, the trade of the country, should have been allowed to go on doing so. If my judgment is right, your readers will take an entirely opposite view. "Pound Sterling” then quotes that gifted and mighty scholar and orator, Mr Canning, as declaring that in spite of the Government’s action in the matter, gold would circulate in its accustomed way. Time, however, proved this great man to have been wrong, for gold did not so circulate then, nor does it circulate now.

My opponent was wrong when he pictured me as a David-llke stripling; he may be as far wrong in guessing that I am a Scotsman. It is because I am an honest man that I object to our farmers getting 18/- instead of 20/-, that I belong to that class which is struggling for justice for all, and not because I am a Scotsman, an Irishman or a New Zealander. And, let me assure "Pound Sterling” that that class is not the one he should be thinking of watching, but that other which defrauded the producers of this country of something like twelve millions in the sale of their last year’s products, and similarly defrauded Australia of about forty-two millions through currency manipulation.—l am, etc.,