CONTROL OF CURRENCY.

Waikato Times, Volume 112, Issue 18808, 2 December 1932, Page 9

CONTROL OF CURRENCY.

(To the Editor.) ' Sir,—l noticed in your advertisement column last night a long notice by the Raglan County Council setting out the details ol' the loan of £3450 for a bridge. Being of a curious nature 1 totalled up the annual payments for 20 years and they amount ■to £GS7O 3s 4d. Roughly the ratepayers concerned have to find in interest an amount equal to that paid to those who provided the brains and swoat to bring the bridge into being. Supposing that the State has complete control of the New Zealand currency system, the Raglan County would submit its proposals; on approval the bank would advance the necessary credit at cost—that is, book-keeping cost on a large volume of business —say, i or i per cent. By striking the same rate the bridge would be paid for in ten years. It is said that if is impossible to fix the prices of primary producers’ products. 1 submit, Sir, that the statement is incorrect. If it is just—and 1 believe it is—to tlx the money value of the services of the other sections of the community, then it is just to fix the value of primary production at a ligure that will enable it to pay those charges and then leave for those engaged in the industry money value for their services equal to that of other sections. This is where we have made a mistake in leaving the greatest industry in civilisation open and fair game for international exchange manipulators. The remedy is State control of the monetary system completely—the servant of the people instead of its master as at present. In my opinion this is how it would operate: Say that a round-table conference is called of delegates representative of every section of llie community, and it is suggested to them that in order to end the present state of affairs immediately they all agree to sign up for three years to accept the average of the period 1914-28 as a basis for New Zealand currency; they accept. Very well, then, the State Bank of Now Zealand lias agreed to pay all primary producers a fixed price, in store, for three years in New Zealand currency. Say the bank pays out £100,000,000 for produce, which is then the properly of the bank, ns the farmer lias been paid for it and has no further interest, in it. The bank supplies the local market willi its requirements through tiic usual channels, working j on a fair percentage, plus bank's book--keeping charge and storage charges. Assuming that (lie internal requircj meals are £30,000.000: the hank must ■ export the balance of £70,000,000, which we- will say realises £30,000,000 | net in British currency after paying | all charges in connection with ship- : ping, etc. Th e hank is faced willi an apparent loss of £10,000,000 in New Zealand money. Tills would he adjusted in the exchange rate, which on my llguring would lie roughly about O i per cent. If we swept away im - j porl tariffs, which 1 am under the inii Prussian average about 45 per cenl., i then our present rale of it) per cent. I plus 0 pwr cent, would tie, about right

—JO per coni, in all. London surpluses not required for interest and imports would 1"' Die property of tin; bank—i.e.. Hie Slate- -and could lie us“d fur deb! reduclion. The opposition will say Inis is uncontrolled in - llalion, but the ledger is square, and tiie currency is anchored to produc-tion.—-I am, etc., B. G. YOUNG. Gordon toil, November 30, 1032.