CURRENCY INFLATION.

Press, Volume LXVII, Issue 20184, 12 March 1931, Page 11

CURRENCY INFLATION.

5 TO THE, EDITOB OV 15* HUBS. Sir,—As Australia haa deeided on sin- * inflation-of her currency, ' 6f > Professor Murphy, appearing, lit "VOtt'r'j I issue of, the 7th inst., and giving ;th£ - Icommonly accejptedidea of what mflai" tion is, and'its effects, ia interesting) 'aft/ 1 being intended to assist -people ia so]vf jug . our economic ' problems. Ftother, 3 it comfcs froan aman ednca?. s- tioTiqi world. 1 ' TKfeVe /is ',l r * .think,, that if the "whole of the v ground, it will mislead instead of afford-, ) ing. help. " ( < <■ ' <■/''" i , Let me evidence. 'J At the close 3 of the .'war/ Germany --was-, sheeted in - thiß way. Externally, she .was * de- * prived of W- overseas \ wEich she drew valuable raw niiatetfalsy, 1 and gave her bases tot 'trade. Her foreign markets'were r 4esfroj!ed, apd r these she.fotand-difficulty J' due to. theiieeling:againßfehßrV'/;3on s<l--1 dition, sbe had to'find large ameraijw ut \ money ,and'kind (coal, etc.)'f<*,t«tera-i !? tions,' Internally, ahe"Wgw - denudedo)! ; necessities,'-.her industries-"were : L standstill, > her -fields largely„ - ba«?> : of * livestpok. Her t availabl6 finances 7 exhausted, her .mercantile marine taken i from- her, and, lastly, , , provinces, : AlsfMW[ lorrai»%/SohM?OTgf " and ; Poland, were gone. £ started, promptly \ to .* 'dustries on a peace footing,' -ajiloptgd-an J 1 ,inflation t poliey,' and tlie maris j to reach unheard-of heightsj amilliDn t mark note was finally worth prefect Q price of a postage stamp, a The, resnlt j. was that due to the" foreign spoculatM>» •, in t?ie-mark< she-was able v t very large credits-in foreign, countries; h this,'gave h<Sr"bothraw materM>pd/an w entr£ for her owri goods, tha. supply of h which, tW manufacture .home' tra4e, -whicf was d by the • inflatedcurrency, enablod * her - >■

health, both physical and moral. "Witt ' ' < this inflation the prico of .commodities rose, of course, faster wagetf, so a that the individual wotkar did n'qt«get g his just due, but,the position" ©f labour was better on the "whole jthan u it ha#>* been in Britain, relatively of 'course.. ' The effect on the, creditor cltts6,rAbcl those living on investments, -was nnaj** ' , - disastrous. "When a debt o& say, $ £IOOO could be discharged with iotas • , whose real value "was but# fraction j-and' ■ | when men with a salaty, tur-^ncome "from investment, found- that-ita power was reduced to'a fraetaton ofitJMJ , face v&lue ol notes received, it "showed I that, a transfer of from oii&UrtMt* tion.o* the people to - place. When -the uttbutr HtottßVm* reached, Germany simply -wiped ' tfco . currency off thp (date, &nd Tevertftu to',? the JJM over the transition ? restwM VSm things to. a* somewhat: normal this "without 1 , (under great ja&fffcionS ~ " tfjas owing" to "this nbVjraO faced -with: thpJ, general trade and,iffiffflplojprittbt?ffil allow it-to get beyotfd' allowing it-to" Me "pegged" --ii, vffi <at tßat. France since tjif Jj 'the 'most' of*,tha 1 ' ■"her' o'wja'; labour 4 as well, drawn-into the general apparently more--slowly,) "\' ■AiJ'i&'V« Britain, . joccttpftiibn .; lately. 'sMtfAgv'if, / "ataajt^^ [ tionA<&r » iewgn&e . our affairs.- i I" write and if this ehQ^retf^fi^e^raoSlßiif > feasor ""Murphy#! 1 ' if big, dictum V 'l.- dofpbV Sir*