LETTERS TO THE EDITOR.

Dominion, Volume 2, Issue 448, 5 March 1909, Page 9

LETTERS TO THE EDITOR.

STATE NOTE ISSUE. Sir,—On reading your leading article of thu 22nd instant, I was convinced that there was a large amount of misapprehension on tlio subject of "Stato issue of Inconvertible l'aper Currency," and 1 must ask you to forgivo me writing against the leading article of ono of New Zealand's most influential papers if I endeavour, through your columns, to throw a little light upon 'the question at issue. 1 am delighted to know tlmt a Cabinet Minister, tho lion. A. AY. llogg, Minister for Labour, has such a thorough knowledge of tlio question of finance. Ypur quotation from Mills, viz.: "To he able to pay oil' tho national debt, defray the expenses of government without taxation, and, in fine, to make the fortune of tho wholo community is a brilliant- prospect, whon once a man is capable of believing that printing a few characters on a bit of paper will do it," is ono of tlio most sciennlic statements possible, and no economist of tho highest authority could prove otherwise. It is only an intelligent and highly-civilised community that can adopt a perfect currency. Tho true nature of money is not tlio amount of gold to the sovereign, but the certificate of credit on tlio faco of tho sovereign, exactly tho samo as tho cortificatc of credit on a bank note or bill of exchange or promissory noto or Stato inconvertible, non-interesting paper bond. All of which certify that a certain amount or value of labour lias been given to tho State, and that the bearer can demand tho same value of labour or its equivalent in commodities as redemption of tho said certificate or lOTJ.. as you call it. No such thing as unsecured inconvertible paper could bo issued by a Government (unless forged, and that is just as possible with our present day bank note), for tho Stato must first receive full value in labour oil public works or commodities for consumption, before such a certificate of credit could be issued, thus creating its own security with which redemption of the note is always possible; furthermore, most of theso public works aro reproductive, hence an increased power of redemption. Take, for instance, last year's financial statement of the Government of New Zealand: you will find that, had we not been plunged into tho English pawnshop to the extent of £66,-153,-897, and been now,paying over £2,000,000 in interest tribute, our receipts would havo been considerably in cxcess of our expenditure, thus, with tho amount of currency that must needs bo always floating, our redeeming power would greatlv exceed our issuing power, lionco tho independence from tho money-lender.

Tho State cannot issue too many notes or create'too much money provided tiiat it is a payment for labour 011 permanent works. Such money becomes a guarantee that the Stato has rccoived its equivalent and it has created its own value. No gold basis is necessary. _ The labourer has exchanged his prodiict, viz.: services for an order or right to demand an equivalent of valuo in other commodities. You also mention tho assignats of tho French Revolution and the paper issue of America, and, as you toll us v?ry little about them, I presume that a little of the history of each would ho w.clcome. Professor Walker, in "Money 'l'rado and Industry," says: "Tile man is not candid who is perpetually harping, in discussions of paper money, upon tho experience of France from 1789 to 1795, when the 'assignats' mounted up to £45,000,000, and their value sank to nothing, but never mentions the experience of the same country between 1871 and 1877, when the premium on gold, oven in tho great war with Germany, never was allowed to exceed 1| per cent, and for most of tho period was kept below 1J per c<?nt.; who never tires of referring to tho disastrous fate of tho continental currency issued by a revolutionary Government that had not tho power to levy, a dollar of taxes. The Frcncii assignats wero destroyed in valuo by William Pitt, who employed seventeen factories in England and 400 men 111 forging them in order to break down tho revolution in defence of Royalty. Pitt put into circulation 111 Franco from 12,000,000,000 to 15,000,000,000 of forged assignats." Supposo our .bank iteijjp could be forged in' tli6 " Samo'!way," : df what value would they bo? With regard to the American groon-back I issue.ofthe War of Secession to tho extent of

1,124,000,000 dollars, which fell in valuo as low as 45 cents, per dollar, Martin's "Monoy of Nations" tolls the story of this issue. When Lincoln required money for the war, the bankers offered it at 20 per cent, discount. Lincoln was not the man to sell the State to the money-changers, so ho declined, and put through Congress a State paper money measure on the lines previously adopted by Benjamin Franklin in Pennsylvania. These notes were full legal tender, aiul never depreciated. When a second issue was required, the bankers mot at Boston and sent their delegates to the Senate. These delegates said Lincoln's measuro must bo defeated at any cost, and tlicy did not hesitate to resort to bribery to get an exception clauso put in saying that tho paper money should not bo received for taxes, interests and bonds. Tho story is still told of old Thaddous Stevens weeping on tho floor of tho Senate House tlmt tho capitalists should be so unscrupulous as to sacrifice tho nation for their private gain. Still ring in our ear Lincoln's memorable words, when lie said of these traitors: "For my part, I wish every ono of them had his devilish head shot off." The result of this swindlo was that tho State paid its employees in a money it could not receivo in return, and henco it depreciated becausc it was not honest money. It is rather peculiar to read your statement that "notes not in excess, in times of brisk trade, would bo in excess when trade contracted." There is no such thing

as contraction of trade under a frco currency. It is by tlio contraction of currency, caused by a contraction of gold, which at present is the basis of all security and which is monopolised by great capitalists, that causes contraction in trade—an example of which wc have before lis at present in the Dominion. You remark about the."feeling of uncertainty which would certainly result" and the "fear of depreciation. 5 ' Yes, it is this fotish or superstition caused by tiie constant use of gold and promoted by bankers and financiers that provents tlio people from trusting their own credit. Tmo money is only a certificate of credit, and should, as all other certificates are, be certified on tlio most natural, material paper. Trusting that I have not imposed tc greatly upon your generosity,—l am, etc., HENRY J. TURNER, Leader of deputation to the Hon. A. V

Hogg. Wa'nganui, February 25. BANKS AND THEIR CUSTOMERS. Sir,—i\'o doubt you are quito right when you say, ill your sub-leader in to-day's issuo, "headed "Tlio Banks and Their Customers," that tho banking institutions aro doing all in their power under the circumstances to meet the demands of customors for money. But, with your permission, 1 would like to point out that tho truo causo of the existing financial stringency, as of every periodical financial crisis, is entirely overlooked by you, as well as by "Tho Citizen" critic whom you take to task, and even bankers themselves do not appear to realise the true causo, which is really not duo to past extravagance, as you assume, but to the profits mado in the past period of prosperity or extravagance being used to inilato land values, so that land purchasers arc forced to undertake to pay in interest everincreasing sums, without a corresponding increase in the productivity of tho land, so that eventually all that can be produced above a bare subsistence, and oven less, for the workers and owners, and which, in times of prosperity, was expended and distributed more evenly among the people, must now be paid in interest, or rent as the caso may be. Consequently wages have to be cut down, and employees dismissed altogether, and expenditure in every way curtailed, except t'or tho payment of the said rent and interest, and thus is tho general purchasing power of the people curtailed, 110 one having money to buy, and hundreds stroking work but cannot get it. In addition to this causo of trade depressions. which could easily bo remedied by netv land laws, is ono which I claim to have been the first man to discover, and which might be regarded as the true Cause of depressions. That is. that a vast amount of money, which is ''imagined" to exist,

does not exist at all, and that what is regarded as money, i.e. currency, is continually disappearing as fast as debts arc extinguished by the oxchango and consumption

of wealth. Hence fresh money requires to be continually created, the total amount in circulation being based, not 011 the supply of gold, but upon the total quantity of labour available for employment, thus increasing as the population increases. Decreasing, should population decrease. It would be impossible lor roe to explain this truth clearly in the space of a letter to tho editor. Somo day/ no doubt, the world will fully realise the importanco of this great discovery, in tho meantime, I suppose, politicians, bankers, and tho public generally, will prefer to muddlo along ill tho samo old groovo, irrespective of tho misery thereby caused, rather than giyo any practical assistanco to anyone professing to understand this problem, though they must know that all tho important reforms in tho world's banking and mercantile system havo been the outcome of discoveries mado by political economists, and not by hard-headed bankers or popular politicians, tho ono with his mind always 011 safe securities for funds available for investment, tho other /Cver seeking to catch tho popular vote. —1 am, etc.,

C. P. W. LONGDILL. Marton, February 27. THE ZOO. Sir, —I would like to know if there is any lemedy for tho awful stench that has been prevailing for some time past at tho Newtown Zoo, and which I learn arises from putrid fish (which is obtained free of charge) upon which tho seals aro fed. Would it not bo better to spend a few penco and feed thorn on something they aro more accustomed to? And thus keep them and their surroundings healthy, as it is far from beneficial to visitors and tho residents who live close by, to say nothing of tho children who pipy all day in the park. Hoping that somo inoro able pen than mine will take this matter up, and that something may be done to remove this objectionable smell. —I am, otc., LOVER OF HEALTHY SURROUNDINGS. Wellington, February 26, 1909. fin answer to inquiries- mado in official quarters, it was stated that our correspondent's complaint is exaggerated. It is admitted that a certain amount of odour is unavoidable, but oven that does not ariso from tho fish consumed by tho seals, and that no danger to the public health was possible. The seals, it is stated, are supplied with the heads of fresh fish daily from tho fishmonger; they are oven received by tho seals before tho general public got their supplies, so tlieyxcan hardly bo putrid.] "THE DOMINION" AND THE TEACHERS. . Sir, —I iquito agree with tho letter which "Dominus Rusticus," 011 behalf of the country teachers, writes thanking you and your staff, among other things, for the assistance you rendered them in championing their cause in tho recent salary trouble. I am sure that many city teachers will heartily endorse all "Dominus Rusticus" has written. Like him, they havo waited expectantly to seo what course tho institute intended to take to express its appreciation of your timely and unflagging efforts on behalf of the teaching profession. As "Dominus Rusticus" points out, there is little doubt that our thanks aro duo to The Dominion for discovering that point about tho "minimum." He might alsb havo added that that alone would probably havo been insufficient had not The Dominion, by persistently and lucidly laying tho matter before tho public, enlisted public interest and sympathy in the ioachers' cause, thereby throwing into the scales—with a happy result—that mighty factor, public opinipn. Believing that in assuring you of a grateful appreciation of tho interest you have shown in our affairs I nm voicing tho feeling of many Wellington teachers, —I am, etc., A WELLINGTON TEACHER. February 23.