THAT GUERNSEY HALL,

Waikato Times, Volume 118, Issue 19648, 7 August 1935, Page 9

THAT GUERNSEY HALL,

(To the Editor.) Sir, —The report of our Monetary Committee concluded its examination of the Guernsey experiment with the words: "The Guernsey Island scheme can be used, but the more it Is -used the lower will be our consumption of the goods that make up our standard of life. In fact, it could proceed until an inflation on the well-known 1923 German model arrived.” The (statement quoted by “Not' Fooled" from the Memorandum of Dissent attached to the report, that “history records no inflation,” has, of course, no value. No sensible person would expect Hie price of a hall to produce a rise of prices of historical importance. Can “Not Fooled" produce 'the least evidence that there was no inflation? “Not Fooled” is quite wrong in assuming that a hank loan would have produced the same inflationary effect. The only bank loan available would have been one raised abroad, and, as everyone ought to know, any such loan would have been transmitted in goods, and could not have caused inflation. Neither do hank advances in general cause the least inflation; if they did, obviously inflation would be always with us.

The reason, of course, is that as now advances are granted old ones arc cancelled, and banking business tends lo correspond in volume with the volume of business as a whole. On the oilier hand, the money printed in Guernsey formed a clear and immediate addition lo that previously in circulation, and it certainly created nothing lo balance itself.

Not one atom of the material or labour used in the construction of the hall was created by. the new nioney, which, merely diverted to [he construction of the hall labour and material previously available. The same labour and material could have been used equally easily and equally profitably if no new money had been printed: and Hie statement, so often made, that Hie hall cost 1 lie islanders nothing is patently false, it cost the islanders all the labour and materia) Used in its construction, and ihc new money, adding nothing to labour and nothing to material, merely added lo the price level with all the usual dishonest consequences.—l am. etc., .1. JOHNSTONE, Manurewa, Au*’unl 3. 1035,