A National Currency.

Fair Play, Volume I, Issue 23, 2 July 1894, Page 10

A National Currency.

GOLD NOW TAXES US 50 PER CENT. ON EVERY EXCHANGE. Article No. 3. —By “ Nomos.” “The value of commodities depending upon a combination of circumstances relative to themselves and to the fancies and wants of men —their value ought to be considered as changing only with respect to one another—consequently, anything which perplexes the ascertaining these changes of proportion, by means of a general, determinate, and invariable scale, must paralyze trade, and may even endanger the safety of the State.” Sir J. Stewart. “ Nomisma (money) by itself is a mere device, which has virtue only by law (Nomos) and not by nature, and so that a change of convention between those who use it, is sufficient to deprive it of value and its power to satisfy our wants. By virtue of voluntary convention, nomisma (money) has become the medium of exchange: we call it nomisma because its efficacy is due not to nature but to law, and because it is always in our power to control it.

Aijpos eti'ttt So/cei to vo/rtcr/ra Aristotle. De Rep. ix.—9. Whether that which employs and exerts the force of a community deserves not to be well considered and understood ? Whether, upon the circulation of a national currency, more land would not be tilled, more hands employed, and, consequently, more commodities exported ?

Whether the discovery of the richest gold mine that ever was — in the heart of this kingdom - would be a real advantage to us ?

Whether the same evils would be apprehended from paper money under an honest and thrifty regulation ? Whether a nation, within itself, might not have real wealth sufficient to give its inhabitants power and distinction without the help of gold and silver ?

Whether power to command the industry of others be not real wealth ? and whethor money be not in truth tickets, tokens, or counters for conveying and recording such power? and whether it be of great consequence what materials the tickets are made of ?

Whether trade, whether foreign or domestic, be in truth any more than this commerce of industry ? Whether to promote, transfer, and secure this commerce and this property in human labour, or, in other words, this power be not the sole means of enriching a people, and whether this may not be done independently of gold and silver ?

Whether it be not evident that we may maintain a much greater inward and outward commerce, and be five times richer than we are—nay, and our bills abroad be of far greater credit, though we had not one ounce of gold or silver in the whole Island. Bishop Berkley.

The voice of one crying in the Wilderness will find an echo in men’s minds when a great truth awakes into life the thoughts which have been lying dormant, awaiting some catastrophic event, or stirring word to revolt against a wrong that has been long endured —an evil that has long awaited a remedy. The calamity now upon us is the monetary convulsion from the appreciation of gold, which has brought great poverty and misery upon the people, and throughout the civilised world is shaking the classes with anxiety and the masses with ominous discontent and awaking unrest. The subject cause has been hitherto but imperfectly under*

stood. We know that by a financial evolution we are losing half —over 50 per cent —of our substance by the augmentation of our public and private obligations, and becoming the slaves of the bondholders, but the wisest of us have not yet grasped the scope of the present upheaval—for if this financial operation be not arrested, and the appreciation of gold proceeds during the next fifteen years at the same ratio as the past fifteen years, we should have nothing left to be robbed of: all the wealth and products of the country would belong to the bondholders and money lenders, who would send out their managers and overseers to ship away their produce, and set their bondslaves to work to keep up the yearly export for their benefit 1 Enlightened public opinion is the indispensable safeguard of government by the people. Let us bring as much light as possible to bear on this question, for it is beyond doubt that if our present financial system be continued there can be no escape from the degradation of our becoming a mere tributary colony to the great money centres, and we have almost come to feel that our lot is servile obedience to this silent power—money.

STATE PREROGATIVE. Here then—first, that Government must cease to abdicate its prerogative (the prerogative in all ages) of furnishing legal tender, money, for the people; let the value of stocks, bonds, and capital be dismissed from consideration. Man is of more value than the gold and silver products of the mines, or the fictitious credit of a bank account. Do this and the past will be forgotten ; fail to do it, and—so soon as the people once understand the cause which has brought them to this poverty in the midst of plenty, to this idleness in the midst of advancement, and its requirements—prepare to face the cyclone. Any system which will compel the many to labour for the few should be avoided by the legislation and administration of t.he Government. It is natural for the agents of the London Gold Trusts to advocate the supreme control of our money system by the managers of concentrated wealth in London, and for them to insist that New Zealand cannot and ought not to have any financial policy without the consent of the gold men. We must not be misled by such men, because their wealth, or connection with the aristocracy of wealth, have so identified them with their interests that they abhor the liberty -and independence of the masses, and believe as devoutly in the divine right of accumulated wealth, as their prototypes of old believed in the divine right of kings ; thus believing, they can see no wrong in robbing the people through the instrumentality of a hidden currency fraud.

financial policy. Let us then adopt a financial policy for New Zealand which shall secure independence, liberty, and prosperity by a national currency—the State-note, the sole legal tender, and a Government monopoly, and demonetize gold and silver (except for token change). No country has relied on gold or any other international money during a great war threatening national existence; all countries in such emergencies have created and used national money —an economic event, worse than war, partly adventitious and partly political and social, has, by altering the the basis-of the currency in countries using a (so-called) golaltandard to such a degree that the industrial and' social existence of some countries is threatened thereby, and, eventually, even their nationality. There can be no. doubt that the losses by farmers, men in business, and every productive class, by the destruction of enterprise, and the enforced idleness of the people, could have been prevented by the rejection of international money, and the issuance of a national or domestic money. A currency based on gold—international money—places every enterprise in this country (as in every country) at. the mercy of foreign speculators, and exposes the entire business of the country to be ruined by the folly, extravagance, or misfortunes of every foreign country. : Business men and Governments—in New Zealand even—-

must delay action in important negotiations every day unto they have read the telegraphic reports of the condition of the money market in Europe, which is liable to create a demand for gold, which affects the stock market even of New Zealand as sensibly as if a similar occurrence had taken place in our midst.

BOND-HOLDERS. The output of gold is substantially consumed in the art 6 and every country is now beginning to realise the danger of the financial revolution which the bond-holding class have aided for power and plunder, and who hail with short-sighted satisfaction the enhanced value of their bonds, through the diminished supply of money, and who would now impress ignorant people with the belief that an independent financial policy for any country is impossible. We say, on the contrary, there i* no necessity for international money for any purpose whatever ; and, although no single nation can alter this defective system, as the law of the world, each community has it in its power to remedy within its own boundaries.

The bond-holders in England may think this in accordance with their own interests. England is now compelling the world outside the United Kingdom to pay to her interest on more than .£10,000,000,000 of obligations in gold, at an appreciation of 50 per cent 1

It is unnecessary to recapitulate former letters which shewed the enormous drain of wealth from New Zealand, and from the industry of the world by this vampire We need only add that on whatever nominal .low rate of interest new loans could be borrowed, the real rate of interest must be measured by the purchasing power of money, which is abnormally high and rising without the remotest possibility of change, except by universal revolution. Therefore, the cheapness would be chimerical.

GOLD-BASIS CURRENCY. It may now be demonstrated that the gold or specie-basis system of currency is what Dr. Max Nordau would have called (had he included this subject) the greatest of “ the Conventional Lies of our civilisation.” That the convertible note, of which 55 per cent of the entire currency of the world consists, is an absurdity, a delusion, and a fraud, and that the system is governed by monopoly and dependent upon chance ; that it is the football of politicians and the tool of capitalists and has given over to the millionaires the control of all the Governments of the world ; and the industrial classes and labor are now paying a tax to these gold men of 50 per cent on every exchange. Wehear of such a satire upon nationality as the Barings having run the Government of the Argentine Republic ; the Rothchilds financing Russia ; and last year a European syndicate took charge of Austria to manipulate her public debt and place that country on a sound gold basis ! And in America the gold men of Wall street, in conjunction with European gold syndicates, control both the president and the legislatures and have now so manipulated the currency of that great country that abnormal contraction is causing financial chaos by which the industrial and wealth-producing classes have been brought to a state of financial servitude embarrassment and menial condition such as was never before equalled—the farmers ruined—all legitimate trade arrested, the labouring classes reduced to pauperism—armies of unemployed marching and counter-marching in their misery, and social revolution and civil war imminent. The while the millionaires and gold men are reaping the enormous gains corresponding to the industrial losses by this financial fraud—the superstition of gold.

ECONOMIC COROLLARY. Here is one of its consequences :—By the census bureau of mortgage statistics in America the total number of mortgages filed between 1880 and 1889 amounted to 9,517,747, the debts amounting to 12,094,577,793d01.; those for 1889, were 1,226,323 —with debts amounting to 1,752,568,274d01. more—how many more to still vaster amounts must have been filed since

1889 to 1898 ? Thus America, onco tho country of home-owning farmers, is becoming one of mere rentors and paupore. By the returns for income tax the combined incomes of 110 millionaires in New York and Brooklyn, out of 1100 whose annual incomesreached 100 million dollars—reached tho enormous total of 97,744,250d01. per annum. Of this return the above mortgage report is the corollary. And what is the economic position of this vampiro, gold, as a'basis of currency ? We know that tho wholo financial business and trade of England is carried on by 1 per cent of gold and 99 per cent of paper—credit; that £8,000,000,000 represent the London doaring house returns annually. With a base of 1 per cent to raise such a superstructure of credit is an inverted pyramid standing on its apex, and must obviously shew that the least of tho various economic forces would cause an expansion or contraction acting in so small a base and which, of coursa, must affect tho wholo superstructure resting upon it. Instance tho crisis of 1857, which gavo a startling proof how inadequate is the largest conceivable stock of gold to support the vast fabric of modern trado and industry—whero at a poriod of unparalleled production of gold, the drain of a fow millions from the Bank of England earned a groat crisis, and millions of property were confiscated by it; thus teaching us that by the system of national money scientifically utilized) mankind may possess a lever of production and an efficient auxiliary of trade far surpassing gold and silver, and oven making all nations wholly independent of those long canonized metals. Again, in America last year lesi than 100 million dollars wore drawn from hor to moot tho demand of speculators, and embarrassed debtors in Europe and, ns a conscquqnco thousands of millions of property wero sacrificed, confiscated in that country, by the loss of a few millions of international money, and America received moro injury in 12 months from this gold which dosorted hor when noodod at home than from all the financial calamities of tho last twonty years.

ECONOMIC POINT ON VIEW. Thus as a basis of currency, from an economic point of view, gold is the cause of all commercial and monetary panics , and crises, of the destruction of wealth and of tho instability of finance public and private, tho solo gainers being tho loviathau capitalists who direct and control its movements. From n national or from a social point of view it places tho dostinies not only of individuals and classos, but of nations in tho hands of an irresponsible few, who aro noithor statesmen, philosophers, or men of genius, or oven men of exceptional talent. Tboy are gold men, money grubbers in soul, and that only.

HISTORICAL POINT ON VIEW. Looked at from an historical point of view wo find it has been the curse of the human race, and condemned economically, politically, and socially by every statesman, sciontist, philosopher and historian. From tho money-tablets found in tho ruins of tho most ancient and mngnificiont civilizations of Assyria of which no history remains—the " nummulitos ”of the oldest Egyptian dynasties; tho paper money of China 2000 yoors, b.c. ; the “ Numnus ” of Republican Romo ; tho iron money of Greece; the national money of Carthago; tho copper roubles of Peter the Great, in Russia ; down to the national banknoto of England under William Pitt; tho paper money of tho early American colonies; and the green back of the civil war in 1862; all testify to the banishment of gold and international money as an unsafo foundation on which to rest the industry, and tno political and social freedom of great nations. A symbolic national currency has been in all ages the power of every country, tho bulwark of freedom and tho safeguard against the monopoly of wealth. Money composed of a so-called intrinsic material, whether mono-metallic or bi-metallic (by international convention at a ratio) is international money, and as such gives tho millionaire capitalists the power to tax the exchanges and enslave the world through the control of the metals, creating monopolies of wealth and impoverishing the masses.

The currency of all nations on a so-called gold basis is really a paper currency, with a very limited base of gold, which flows about to the different parts of the world under the direction and control of the gold syndicates and capitalists to suit their interests, they reaping the benefit of the whole superstructure of credit by controlling the base—gold.

CONVERTIBLE NOTES. Thus the truth is, that of the enormous superstructure of convertible notes and of credit based on gold, less than 50 per cent of the convertible notes, and not any of the other forms of credit, could be redeemed in gold. Then what is the utility of this fictitious gold basis, which causes, by iis fluctuations, such instability of values, except to the capitalists as a tool to monopolise the wealth of the world ?

As an investment for savings to crystalise wealth, gold doe 3 not exist, as saving and investment must go on pari passu —otherwise accumulations of a single year (in England, for instance) would absorb the entire metallic currency ; the investments for savings, therefore, cannot be made in cash. As a basis of currency, to secure a so-called “ standard of value,” and “measure of value,” it is useless and delusive; though the term “ standai d of value” is nonsensical, and the notion of money serving as a common “ measure of value” is wholly fanciful—the very phrase indicates a misconception—value is a relation ; how can there be a “ standard of value” ? and a relation may be expressed but not measured. Therefore that function of money is to express the value of other things, and itself should be an invariable scale. And, therefore, any money, of whatever material it be composed, is merely a counter or ticket for that purpose, to transfer, record, and circulate credit. In establishing a national currency, then, history will guide us, first by the examples of the grand civilizations of antiquity ; second by the experience of modern countries, attempted, more or less, on the same refined conception, and we find that the success of the latter has corresponded to strict adhesion to the conception of the principles of the former.

Then let us shake ourselves free from the incubus of the gold shackles which are binding us in a horrible industrial 'slavery, by a gold taxation of 50 per cent on every exchange ; and let us work out our own destiny in our own money—a n oney which would be a public institution —then the State and the people will be one.

As described by the continental address to the people of America in 1779, “ That paper money is the only kind of money which cannot make wings unto itself and fly away; it remains with us ; it is ever ready and at hand for the purposes of commerce or taxes, and every industrious man can find it.”

A NATIONAL CURRENCY. The principles of a national currency are : (1). That the State-note be the sole and exclusive legal tender (no other money circulating co-ordinately with it), as the value of the integers of money depends on their numbers, that is, that the unit of money is all money; therefore, that the value of money depends upon its volume, and not on the material of which it may be composed. (2.) On specific limitation and regulation of the issue by the State. (3.) On the monopoly by the State of the fabrication and issue of money, with the strictest guards against counterfeiting. The Hon. W. D. Kelly said in Congress in America in 1870 Beyond the sea, in foreign lands, the State-note is, fortunately, not money; but when have we had such a long and unbroken career of prosperity in business as since we adopted this non-exportable money ?" H. C. Carey to Hon. W. Field, 1873 : —“ Does or does not our duty to ourselves, and to the world at large, demand that we maintain permanently a nonexportable currency ? The affirmation to this question is also in harmony with the practice and experience of great nations, and in harmony with the teachings of sound economic science.’’ yhese opinious are of weight, because the system these

statesmen uphold was really then very imperfect, as the original Currency Bill of Stevens had been emasculated by the exception clause, “ except interest on the public debt and duties on imports payable in gold.” This clause virtually created two kinds of money, and destroyed the scientific conception, which is the power and virtue of a national currency.

INTEREST-BEARING BONDS. Under this system the issue of interest-bearing bonds would not be needed, therefore, no more bonds for ever. Bonds increase the burdens of the people to pay interest on their own money and lead to slavery. Suppose a National Currency Bill passed by the New Zealand Legislature, and counterfeiting made felony-treason against the State, currency commissioners would be appointed by and responsible to Parliament and who would control the State bank department (for Government business only). The issue of the State note would be limited to the amount sanctioned by Parliament and registered, such issue being the sole currency of ihe country, and a record—open to the public—kept of every note issued or withdrawn from circulation; and Parliament would sanction a further issue only on the report of the commissioners recommending such to meet further increased circulation of industry.

The State would thus control absolutely the currency of the country, and could regulate its value on the law-of money—that the value (or purchasing power) depends on the whole volume in circulation, i.e„ in inverse ratio to its quantity.

ADVANTAGES. The direct and immediate advantages would be the saving of probably .£200,000 annually in interest on the issue—or corresponding to the amount issued —then a further sum of probably £150,000 annually would be saved in present bank charges for agency, commission, exchanges, etc. But the greatest and permanent advantages would be the power, the scientific utilization of that power to advance the industries and wealth of the country and protect the interests of the people. For every public work, railways, roads, etc., and the utilization of the public lands in large areas as co-operative farms could-be aided by this system, and the unemployed problem proved a ridiculous bug-bear, the outcome of economic ignorance, for no matter how many thousands arrived, all could be made wealth-producing citizens, the greater their number the most to be welcomed, not feared; as Carlyle says “a white European man standing on his two legs with two five-fingered hands on his schackle bones and a marvellous head on his shoulders is worth 50 to 100 horses.”

Take a hypothetical example—say Parliament sanctioned the issue of six-millions in State notes, of which three millions would probably be required by the banks, as the basis of their own trade operations, thus placing these institutions also on a solid foundation and independent of the treacherous and fictitious gold basis, and for which three millions in State notes the Government would doubtless'take the drafts on London of the respective banks—taking two millions as the present requirements of Government for expenditure and emergencies, this would leave one million in hand for present urgent public works, etc.

ANALOGY. As analogy—let us use the commercial principle, as laid down by the great advocate of “ An Aristocratic Republic of Bankers”—heaven defend us—in expounding the great cash credit system of the Scottish banks, the dirty £1 note ” —in using this credit they made capital of the expected profits of the future, not only has almost the entire progress in agriculture (in Scotland) been effected by these cash credits, but all public works of every description, roads, canals, docks, harbours, railways have also been made by cash credits.”

■“ It is thus seen how credit can be applied to the formation of new products equally well as the transfer of existing ones; as a purchasing power it may be applied to the purchase of

labour to form hew products equally well as to transfer exist ing ones.” ’ - “ In discounting mercantile bills the banker merely buys up the right to a future payment to be made out of the profits of the transaction—in creating cash credits the banker merely buys the right to a future payment to be made out of the future profits of the land or other public work . . “ The principle of the limit, however, being exactly the same in both cases, viz., that it is the present value of the future profit.” It will be seen the gigantic utility of the Scotch “ dirty note.” WHAT IS SAUCE " FOR THE GOOSE. .Acting'on the homely axiom. “ That what is sauce for the goose, etc.” and that s, fortiori these public works, etc., could be carried out by the Government under a national currency on a scientific system—strictly adhering to the law of money—that of whatever material it be composed, gold, paper, or leather, the value of the legal-tender money is in inverse ratio to its quantity; and bearing in mind the fundamental principle of Turgot “ that currency is transferrable debt,” “ that money represents only debts and services due which have not yet received their equivalent in commodities—where there is no debt there can be no currency.”—“lf currency (money) increases faster than'debt or services due, it immediately'causes a diminution of its value—and vice versa.

Therefore in Government aiding these undertakings the circulation of industry would bo vastly increased, and more currency would be required to circulate that industry, i.e., debt and services kept in harmony with currency : the increased currency would be issued only for value received ; the currency would flow thus from the treasury to the people for services, etc., and back again to the treasury (or State bank) from the people in payment of taxes, etc. The Ministry who have the wisdom to fathom the depths of this monetary problem, will, by its solution, raise us out ''f the financial slough of despond, and make this country the most wealthy, prosperous, free, and contented people in the world—and they would deserve the power of office for an indefinite period. But it is the riddle of the Sphinx—solve it or be destroyed—half measures on this great subject would have no effect at all, and would fail ignominiously. Currency can only be based on a scientific principle—always regarding the fundamental truth—that money is not the value for which goods are exchanged, but the value by which they are exchanged.