THE CURRENCY PROBLEM.

Waikato Times, Volume 111, Issue 18618, 22 April 1932, Page 9

THE CURRENCY PROBLEM.

(To tho Editor.) Sir,—Complying with a suggestion, I resume the discussion of this most important subject usually regarded as very abstruse and yet easily enough understood if one keeps in mind the simple basic facts set out in my letter appearing in your issue of 11th. Inst. 1 shall reply to only one question raised by friend Hodgson for I candidly confess I cannot comprehend the meaning of the others. lie has completely " tangled ” my “ common mind.” Tho qualities rcquisllc in a universal denominator of values arc several:— That it shall itself possess a value based on labour of production, lie easily portable, he durable, lie easily divisible, possess uniformity in quality, lie readily recognisable, and last but by no means least be universally acceptable. If Mr Hodgson ran name any substance lhat possesses these qualities in greater degree than gold then 1 give in to him. 1 must compliment our good friend “ Adam S. Mugge ” on tho humorous and gently sarcastic opening to his letter. I shall not attempt any counterblast to it for space is valuable, and many serious issues to he tackled. I want to he brief lest any dub me Adam R. .Nuisance! It would appear at first glance that many of tho questions raised by Mr Two-lhirds-of-lhc-truth Mugge are wide of tho currency question. Rut money enters into every sphere of our life and ail our actions have a hearing on the problem. To correctly understand the theory of wages we must completely eliminate from our minds the political ciau-

] trap of a “ standard of living.” Wages I arc the proper share of the workers |in tiie production of industry; (hat I share or proportion should ‘be the : highest possible; and the workers should receive their share also of the pioduce of the machines which they work. The higher thef produce the higher the wages. Machinery efficient in the production of useful comniod- , ities is a great blessing to mankind. Ihe remaining Cunard stokers should have some share in the benefit of the new machinery; hut I may here rej mark that their higher \vtfges wilt not greatly help the dismissed stokers. I join issue at once with brother Mugge and stand firmly by the statements that (a) there is no such thing as want -of work, (to) there is no such thing as overproduction. Work surrounds us on every side—mountains of work. What is the matter is that workers are not satisfied with the produce of their labour. In New Zealand our only resource worth talking about is the spll, but the great bulk of workers are not satisfied with what

can be -wrung from the soil of New Zcaland. To talk of overproduction -while hundreds of millions of men are on the verge of starvation and nakedness is nothing but blasphemy. What is at fault is distribution. The nations are not satisfied with natural barriers to mutually advantageous intercourse—the oceans, the mountains, the rivers, the vast distances; they must needs erect great artificial barriers to keep out of their respective countries “ the abundance of the good things of physical life ” as friend Hansen so well puts it, and to keep in this figment, this money. The Americans burn their wheat and plough in their cotton because they refuse to trade with China

l and India. They are afraid of cheap I Asiatic labour! Every American worker i has on the average six mechanical horse power at his elbow; he has the further advantages of education, of j abundant finance and of organisation. ; And yet he is afraid of the naked i Hindu with his two bare hands! I i repeat a phrase I coined when recently iin tlie United States: “Protection is ! the policy of cowardice, of enmity and 'of scarcity. Free trade is the policy j of courage, of goodwill and of plenty.” The quantify of currency available is not material. Its effect is only ! psychological. What matters is- the i use to which people put the money which they have. The users of money • that best known of families—the Mugges together with their “ in-laws," i tho “ HnnohooHc

the Boneheads, and other family connections—must ‘ show commota sense and prudence. Each member of the family may not have much money but they are so numerous that in the aggregate they control a vast lot of currency. If they “ invest ” it in gambling on the Stock Exchange, in “ art unions " for alluvial gold, in horse racing, in degrading pictures and . the palaces therefor, in joy-riding motor cars, their money will leave them and their country without any return, and they will become impoverished. And if, in addition, they borrow at interest the money for these useless undertakings, and indeed for everything they possess down to their very pants at 2s 6d to the tailor and the rest at so little a week while they wear them out, they will be everlastingly poor. But if, on the other hand, they put their money into food and raiment and dwellings they will usefully employ much labour and themselves enjoy "'the abundance of the good things of physical life.”—l am, etc., E, EARLE VAILE. Broadlands, Rotorua, April 19, 1932.