Wairarapa Daily Times [Established Over 50 Years.] MONDAY, OCTOBER 20, 1930. ECONOMIC ILLS.

Wairarapa Daily Times, 20 October 1930, Page 4

Wairarapa Daily Times [Established Over 50 Years.] MONDAY, OCTOBER 20, 1930. ECONOMIC ILLS.

The evils of inflation of note issues have been so vividly before the peoples of the world during the past ten years that one can hardly conceive of New Zealanders seriously considering an inflation proposal. But the times are out of joint, and the would-be doctors of money issues, depending upon the chance that a gambler’s throw will be accepted to mend matters, are putting into circulation their nostrums. The proposals vary from “just a small addition” to help more production, to proposals for a 50 per cent increase in the note issue, so as to bring us back prosperity, it is said. Inflation is intended to be an issue of credit on commodities to be, not so much on commbdities in existence. It is not intended to discuss how inflation brings about its results of continually increasing prices, but to give some instances from history of results which have occurred in the past. Many instances are given by Norman Angell, a Labour member of Parliament of Great Britain, in his recently-published work, “The Story of Money.” In the British colonies in North America in the ißth century, issues of paper money as legal tender were numerous, and as a result of these excessive paper issues prices rose. Goods which could be purchased for £1 10s lOd in 1707 cost in 1747 £ls 2s 6d in paper money. Wheat rose in the same period from 5s to 2.1 s a bushel; maize from 3s to 20s, beef [Torn 2|d to Is 6d per lb, shoes from 5s a pair to 60s. In Massachusetts in 1739 bills to the nominal value of 16s would not exchange for more than 5s in coin. Dr. Douglas, in his “Historical Summarisation of New England,” states that in 1748 “prices were high, debtors demanded more currency, and the normal vicious circle (spiral would be a more adequate word) of high prices, more money and higher prices, Avas in full swing.” The efforts of the British Government through the Royal Governors to prevent inflation, contributed to the irritation against the mother country. Which

culminated in the revolutionary war.” Washington said it took a waggon load of dollars to buy a waggon load of provisions. Early in 1780 the paper dollar had fallen to 2 cents in specie, and before the end of the year it took ten paper dollars to make one cent. In the autumn of 1779 Congress was horrified at the thought of repudiation ; six months later it provided for redemption at the rate of 40 paper dollars to one “hard” or silver dollar —a repudiation, as Angell points out, of 97 per cent. During the period of the French Revolution, assignats of the nominal value of 45 thousand million francs were issued, probably twenty times the amount of coined money then in France. In February, 1796, a hundred franc assignat fell in value as low as 3-|d, and a pair of boots sold for 4000 francs (nominally £160).