COST OF LIVING

Dominion, Volume 13, Issue 77, 24 December 1919, Page 8

COST OF LIVING

'. AN INTERESTING DISCUSSION. By Telegraph—Special Correspondent. Palmerston North, December 23. At a. Palmerston North. Luncheon Club gathering to-day, Mr M. H. Oram, a young' barrister, gave an address on "The Cost of Living." Mr. Oram based his remarks on the 'theory propounded by Professor Irving Fisher, nnd said that a large nniount of the industrial unrest prevalent throughout tho world could be removed \ if we had a stabilised unit of the monetary .system. Ho pointed out that many theories had been advanced as to'tho causes, of the increaso in the cost of living, but the real cause, as found by economists of the present day, was instability of the medium of ' exchange. , Quite apart from the war there had been n. general increase in tho cost of living . in almost all countries during the past few years. In 1819 £1 in England was •worth three times more than its value ' ' to-day. Looked at from another point of view, the increaso in tho cost of living had really had a depreciating effect on the purchasing power of the unit of exchange, viz., the sovereign. He gave as an instance the case of n. man who, say, three years ago invested ,£.IOO on fixed . deposit at interest. He would an actunl •value now when ho eamo , to draw out ■ Tcceive no interest, but would have to draw on his capital beforo it would have tho same, purchasing power as the amount originally put in. Mr. Oram stated that tho monetary Bj'stem in force was the only unstable one. The units of length, 'weight, and . time were all scientifically fixed, whereas tho unit of the monetary system, being .based upon weight instead of upon value, •. was one of constantly fluctuating purchasing power. The index system now in force gavo a means of watching and accurately gauging the rise and fall of tho cost of living. The problem had been approached in America 'by men of com- ■. mercinl firms making wages vary with the variation of the index number. In New Zealand it was provided that Arbitration Court awards were to take into consideration variations in the cost of living. < . • The scheme briefly suggested by Professor Irving Fisher was that the unit of exchange, viz., the dollar in America nnd-the pound noto in New Zealand, should'be fixed, from tho index number on a certain definite purchasing power. This would he redeemable b> a certain weight in gold if required. If then thecost of living went up 10 per cent. ,of the index number, the £1 note would still pnrcKaso' tho same amount of commodities by the 10 per cent, being added to the .gold,, of which tho .£1 note Toould be 'the' exchange. Thu scheme, briefly, was,to fix the cost of commodities and let the value' of im ounco of gold vary accordingly. If this scheme could be adopted, a given wage or given income would always purchase exactly the eame quantity of commodities.-and the wage- '' earner would never be penalised by a rise, as the- value, of the sovereign would vary accordingly. ■ ,On the matter being thrown open for discussion,'.' Mr. E. 11. Crabb contended that nc amount of tinkering with the ex-change-could ever really affect tho probleih'at issue. The problem was an international one, and different standards might be fixed in different countries. This, of course, would cause untold confusion, as the value of the unit would vary in tho different countries in which credit had been given. At the present time the only countries in Europe which o.oiild pay their way were Great Britain and America. To his the real sohu ticnrlay in an increase of production, Mr. Ayrton said bo was of opinion that while Mr. Oram's theory might provide eome measure of relief, the remedy should bo looked for in moro efjuitablo distribution. ' ■ ' Mr. P. Eo?s suggested that noremedj -other than doing away with the entire system of capitalism would ever provide any permanent measure of relief. ' The method under which we at present lived had entirely outlived its usefulness and should givo'place to a system more in keeping with prfsent-day needs and democratic demands. i After Messrs. P. C. Freeth and Hodder, jun., had spoken, Mr. Oram, in replying, said that lio had brought the question forward as a. student in economics, in order that it might lend to discussion. Ho spoke strongly on the instability of tho monetary unit, and said the system should be reorganised en thft basis of the value, and not on tho weight of'the sovereign. If the question exchange could be arranged amongst various countries, they would then Imve a clear Toad for the remedy.