THE LEGION AND STAMP SCRIP.

Timaru Herald, Volume CXXXVII, Issue 19665, 6 December 1933, Page 8

THE LEGION AND STAMP SCRIP.

To the Editor of “ The Timaru Herald “ Sir, —It can be recalled that “Notabilis” had his last letter published in your paper on October 17. “Notabilis” never answered the reply made to his letter; in fact “Notabilis” has been silent for six weeks. However, he has returned to make another running shot. It is very unfortunate, but his letter contains very few attempts to answer criticism; instead, the letter is itself a criticism —a criticism of a critic. The letter exposes the methods of the Legion in answering criticism. “ ’Nota Bene’ accuses Dr. Fea,” states your correspondent, “of being afraid of defending stamp scrip in cold print.” Yes, to be sure. Dr. Fea issued a challenge to debate stamp scrip. The weapons were chosen, and everything was ready. People were even waiting to see the fun. But Dr. Fea disappeared. Certainly, Dr. Fea must be afraid to defend stamp scrip in cold print. “Notabilis” states that Dr. Fea’s “able expoundation from the public platform"—whatever that is—was published in your paper. Dr. Fea’s address at the recent : ‘amp scrip meeting was reported in your paper, and moreover, it has also been criticised in these correspondence columns. But, Dr. Fea’s “able expoundation from the public platform" does not absolve Dr. Fea from his challenge. If Dr. Fea is not afraid to debate stamp scrip in cold print, why has he not proceeded ;ith his challenge? “Notabilis” is respectfully and particularly asked to answer this question. Now, after saying much about Dr. Fea’s “able expoundation,” "Notabilis” proceeds to contradict a statement in that “able expoundation.” “It is utter stupidity,” states your correspondent, “to suggest that the case has not been diagnosed.” And, at the stamp scrip meeting. Dr. Fea said: “What the reason was, we are not concerned with.” In fact, Dr. Fea’s statement is what “Notabilis” terms “utter stupidity.” “Notabilis" had better apologise to Dr. Fea, because he has severely maligned Dr. Fea's statement. It is rather regrettable that so much time and trouble have been wasted over stamp scrip. It is also rather regrettable that the stamp scrip supporters in Timaru did not study some of the cardinal laws relating to money circulation. It has been proved that providing prices remain steady, only a certain amount of money will circulate at one time. The amount of money circulating is. of course, regulated by the value of that money; but it is also regulated by confidence. If more money is out into circulation it will either inflate local prices, or it will increase bank deposits. If stamp scrip was issued in Tiinaru —and that of course is imi>ossible —it would not necessarily increase the amount of money circulating in Timaru. It would probably force many ordinary notes | back into the banks* If it were posi sible to increase the amount of money ; circulating in Timaru. that function would be performed automatically. The banks already possess ample facilities for granting credit. However, it must be pointed out that the banks cannot release credit unless the j>eoplc who possess credit resources are prepared to use their credit. It must therefore be evident that the amount of money ; circulating in Tlmaru cannot be increased by a local issue of notes. One thing alone will increase both the circulation velocity and the amount of money cLrculotin,- in Tlmaru; that one thing Is a rise in the export price of

the products produced in South Canterbury. Such a rise would not merely increase the credit resources of South Canterbury, but would also give people confidence to use that credit. Therefore, the present rise in wool prices will do more for New’ Zealand than all the blatant, fanatical currency schemes added together. It must be quite evident that stamp scrip will not increase confidence, nor will it increase our export prices. It is quite impossible to remove a currency block in Timaru by issuing more currency. At the present time, the increase would only increase the deposits in the banks. The banks are already very full with deposits. No local remedy possesses any real value. Just as Timaru depends on South Canterbury, New Zealand depends on prices overseas. Of course, currency will circulate more. rapidly if confidence is increased; but the only sure way to increase confidence is an increase in our export prices.—l am, etc., NOTA BENE. Timaru, December 2.