CURRENCY.

Waikato Times, Volume 118, Issue 19661, 22 August 1935, Page 9

CURRENCY.

(To the Editor-)

Sir,—ln answer to Mr A. Warburton, I might say that “the velocity of circulation of currency" is not unknown to Douglasites- The Arapuni Lake and power station act as a bottle neck and make a very good illustration of the quantity and velocity theory. We must issue money (in whatever form you like), the “value" in fact being the same as that of the goods produoed, and moving with the same velocity—4-0., changing hands at the same rate. As fast as the producer produces values, so must the consumer receive money of equal value. Only if this condition is fulfilled will all the goods produced And a purchaser, and for what other purpose than to be purchased and consumed?

Additional money only impedes existing money if the amount of goods remains the same, if money is doubled and goods remain the same in quantity, then it will take twice as much money to buy a given amount of goods. Under our proposal, however, there is no Inflation whatever ip the true sense of the term; for we deliberately and by calculation make the total flow of money exactly equal to the total flow of prices—neither more nor less- The tendency, therefore, is to stabilise the value of money rather than unsettle it in any way.

I agree with Mr A. Warburton that Douglasites do not worry about facts, beoause facts look after themselves. My ' friend says England, unlike France, Is gradually emerging from the economic bog. But why? My paper informed me a little while ago that the British Government had raised a loan of £350,000,000, just to carry on a little longer. Evidently they must have been getting short of money in circulation. —-l am, etc., A DOUGLAS STUDENT. I'encourt, August 18, 1935.