CURRENCY REFORM.

Waikato Times, Volume 114, Issue 19124, 8 December 1933, Page 7

CURRENCY REFORM.

WANGANUI MAN’S PLAN. SPECIAL NOTE ISSUE. “Throughout the civilised world the instability of the monetary unit has brought unemployment and distress to the nations,” declared Mr P. Tingey, .in an address on currency reform, to the Wanganui Chamber of Commerce. “I would suggest that to get over the difficulty of the importers having to pay high exchange the Central Reserve Bank buy gold and lodge it for safe keeping with the Bank of England against the gold issue, and the New Zealand Central Reserve Bank’s legal tender notes. Assuming the gold value at £12,000,000, notes could he Issued on a basis of 25 per cent, to ■lO per cent, extra. Tills, on a basis of 25 per cent-., would equal £15,000.000. The freight would lie a mere bagatelle if it would he necessary to print them in England. The noles could be of various denominations, interest free. The Position Summarised. "Under the proposal we can summarise the position as follows: (1) !t would remove the necessity for tlio high exchange; (2) the producers

would have no cause for complaint, for they would still be Paid in New Zealand currency as at present, 25 per cent over sterling level of prices; (3) the British manufacturer also would not complain, as It would put him on a better economic footing to compete for New Zealand markets; (4) the New Zealand manufacturer would welcome the proposal to remove the exchange, as he would be able to Import more raw materials, and the effect of more interest-free notes in circulation would create more demand; (5) the .trading banks would welcome the proposal, for it vviil icmove the note tax, approximately £250,000, and also the cost of issue; (G) the people would welcome the change of their accounts being exempted from the annual charge of £1- (7) the Government would not only save £3,000,000, less £250,000, a net saving of £2,750,000, hut could do away with the financing of Treasury bills, now costing millions. Get Rid of Unemployment. “When I placed these views before one of Wanganui’s authorities on banking economics he expressed the opinion that the banks would not he able to absorb the notes over and above the average note holdings of the six trading banks —roughly £0,500,000.” said Mr Tingey. “It would be necessary to try to absorb the total of £15,000,000 by immediate circulation. Provision could be made for publio works to be financed, • not by •

taxation, but with legal State Central Reserve Bank notes. If instead of relying on bank, credit we could create our own money originating in goods and services, we would no! only have the best money in the world but would soon get rid of unemployment.. “The Central Reserve Bank can be a power for good by the regulation of credit to equate goods and -services. This credit must be represented in value as a monetary policy, with local currency that would stabilise New Zealand’s internal price level.’'