CURRENCY AND BANKING

Wanganui Chronicle, Volume 75, Issue 118, 21 May 1932, Page 6

CURRENCY AND BANKING

Sir, —I have before me Air Hugh C. Jenkins’ very lucid analysis of the bank year published in tho “Chronicle” of the 11th. inst.; also Air P. E. Tingey’s illuminating 1 tter in the same paper of the 18th. inst. 1 have recently read quite a lot about Major Douglas’ social credit system. Being a seeker for wisdom 1 am gitting into a fog. One very capable man tells one thing, another equally capable says quite the reverse. The astonishing thing to me is that the advocates of the present system and those who pin their faith to that of Mr Douglas, use words from Reginald AlcKenna to flinch their arguments. Now, most people know that Mr R. AlcKenna is a banker of world-wide repute and it scarcely seems reasonab'c' that his ideas would be in the direction of money from nothing. I, personally, cannot see how we can carry on under the system of interest upon interest, as it. is creating enormous capital or credit that does not exist; therefore, to a certain extent, I agree with Mr Tingcy. But when it comes to making credits on the community’s security I am fogged. Who is to get the credit? Everybody or a few? For argument, suppose the Government issue notes or credits for ten mil’ions; is it to be scattered about without any productive service and no interest paid? If this is practicable, why is it not done? Wc are constantly reading what the economists say, and often they are as far apart as the Toles; seeing that the exports are at variance it is useless for ordinary mortals to worry. I am inclined to agree a little vyith IL C. Wells, vide cablegrams in papers of 19th. inst., when he said in addressing the intellectuals of the London School of Economics: <<- Wo are living in a brighter but mnre dangerous world. Civilisation is visibly eol’apsing. Every week something breaks down. It is impossible to see how far the ruin will extend. The social, political and economic sciences are struggling hard to overtake the rapid collapse, Now. sir, suppose our money system breaks down, what would the yorld be ike? Awful to contemplate, I should sav. J. HIDDELLS. P.S. —Since writing the above I have read in your issue of to-day a letter from a bank officer signing himself “Practical Thinker.” Not being a banker or one versed in the science of finance, I am not jn a position to argue, but there are some things I watch very closely and o n e statement that “Pravtical Thinker” makes seems to me not in accordance with facts. He puts the case of tho bank receiving a Treasury note for £lOO and paying note tax on same, £4 10s, Records show that tho banks pav per cent, on approximately £i’',ooo,ooo and have been doing so for a few years past (see Government Budget); according to a schedule in Mr Hugh Jenkins’ analysis *he banks hold Government securities totaling over six millions. Was not this six millions financed by the ordinary note issue as follpw: Credit to Govern-

ment £lOO cheques issued by Treasury against the credit and paid with ord'nary note issue? J J.S.