CURRENCY CHAOS.

Hokitika Guardian, 13 October 1923, Page 4

CURRENCY CHAOS.

RECKLESS WAGE INCREASES. < N.S.W. Paper). An arresting picture of Germany, as seen from within l\v a close observer, and of the tragic disillusionment of the German worker, in the lip;ht of the debacle which lias overtaken the German currency, is draw it by Mr \\ .11. Curbould, late general representative and consulting engineer ol .Mount Elliott, Ltd., on his return to Sydney recently from a visit to Europe. “It cannot be denied,” said Mr Corlmiild, in an interview, “that the war was responsible in some measure for the depreciation of the currencies of such nations as Germany and Austria, which, at the end of live years ol hostilities, found themselves militarily defeated, and saddled with large national debts by way of reparations. At the same time, the war alone cannot be blamed for the utter demoralisation which has overtaken the currency of these nations, and which in Germany lias now reached the point where it takes ‘210,000,000 marks to purchase what can he bought for an hnglish pound sterling. Ueforc the war 20 marks went to the pound sterling. This expression of relative money values is. of course, tantamount- to a <omplde admission that Germany's internal oiKteticy system has broken down, ami that her paper money m quite worihlofs —that it is, in fad. more paper and not money at all. Kor money can best be defined, briefly and generally, as ‘a medium of circulation and exchange.* and Germany's paper marks no longer have the power to induce foreign merchants to exchange for them the commodities they possess.

Since it is clear that the European war cannot have lieen the sole cause of stieli a linancial upheaval, f should like, as one who has spent the lasi tim years in Europe, to |>oiitL out v.lint, in my opinion, lias lieen mainly responsible for the financial demoralisation of one of the greatest and wealthiest nations of the norhl. The clamour for higher and ever higher rates of wages set the stage for the drama, and 'he willing acquiescence of a new (hive, nmeni, not sure of itself, and striving to pineale an irritated and war-weary democracy, lonl swift aid to the movement. “To give an example of what can

happen to a nation situated as Get'-, many or Austria was after the armistice, it may he mentioned that in the latter country, which is controlled hv a Socialist Government, wages were increased 13,000 times above normal rates, and the hours of labour were reduced, but far from benefiting by this sudden accretion of apparent riches, the worker is worse off than ever lie was, and is now beginning to realise that it is not the amount of money he earns, but what he ran purchase with it that must he the measure of his future prosperity. “As far as internal Germany is concerned, the collapse of the mark most seriously affects the prolessional class and those middlo-cla-s millions whoso fate it is to receive a fixed and not a fluctuating remuneration for their services. Business people, of course, can and do adjust the prices of the commodities they sell by the addition of a nought, or two to the price tags, as often as economic circumstances demand, so that when the workers’ demand for an increase in their wages result in an addition of ten or twelve million marks a week, the farmers and tradespeople leave him nothing of it by simply adding a few noughts to the price of his loaf of bread or Ins pound of meat. The result obtained by the wage earners of Germany is. therefore, that they have, for some years past, given their services to their employers and have received in return just enough paper money to buy the necessities of life. Any money (if the expression may be used as applied to German paper money) that they had saved has so depreciated as to he worthless, and with nothing at all in hand against the depredations of sickness, accident, and old-age, the poignant position of the German worker can lie vividly imagined.

“There does not seem to be much likelihood that those nations whose currency has collapsed will, or can, do anything really drastic to restore it. The worker will not realise that money is only a token, and that it is useless merely to increase the number of those paper tokens unless there be a stabilisation of their purchasing power. Xor will the working man realise, or admit if he does realise, that such stabilisation is impossible, unless and until the demand for higher and higher wages and reduced hours of work ceases. EfFicent working by labour of the raw products of the earth at minimum rates will result in a stabilisation of

ihe currency, and the much desired low cost of living will come in its train. “In Austria, where the League of Nations has installed a Controller to assist the Government in its task of financial reconstruction, the kroner is now stabilised at 330,000 to the pound sterling. Before the war 25 kroners went to the pound sterling. It seem? likely that in that country the Government will shortly he in a position to reduce the present rat© of exchange by reason of the greater efficiency shown by all classes of labour. This increase in efficiency has had the effect of increasing the nation’s exports, and the kronor will probably soon be established at 250,000 to the pound. The Government will then call up all the old iiofe currency, and issue new notes, printed thus:—2soooo. By this means the people will be educated to read and pay attention only to the large figures, the noughts not being taken into account :so that gradually the 250000 kroner note will c-ome to be spoken of as a 25 kroner note. As i his was the pre-war equivalent of the pound sterling, the 250000 note issue will, after the lapse of some time, be also withdrawn, and a onto issued on a gold currency basis of 25 to the C.

"A somewhat similar method of readjusting the financial chaos will ultimately have to be adopted in Germany, where no doubt the whole ol the present paper currency will eventually he scrapped. “Summing up, it can bo laid down as a general principle that the striving after high wage rates as a panacea for industrial ills, is the striving after a shadow, and the working-man’s condition cannot he improved liv this means only, all the imagery of socialist dreams notwithstanding. Further, any Government that panders to a section of

the community in such a manlier a- baboon recited of the Gorman revolutionary Government, is merely building up a pile of i rouble for future days and making the regeneration of a spent nation a problem of almost insoluble difficulty. “The British Empire has strenuous years ahead, and we should pray for strong, linn hands to lie available to guide tin- reins of State and mould onr country's destiny in tile shape our ancestors would have had it. Foreign countries are hard at work building tip and fostering their industries new and old. By work we must see that our exports exceed our imports, for, after all, our exports are our national wealth, and represent our credit balance in the hank of the world of com-

merce. AYe must he prepared to compete in the world’s markets for the sale of our produce and our manufactures. To lie able to do that we must ho able to rely on our people working, and working honestly and well under conditions that other civilised peoples would regard as reasonable. It is unreason that is the undoing of socialism. AYhen the hard test of practicability is applied to the ideals ami dreams •>1 socialism, and they are examined through the discerning glasses of reason, they fade away as desert mirages, for they are unreal, unreasonable, and unattainable.

“Lot flic mournful experience of Germany bo our lesson in Australia.

If her example prevents oilier nations Ironi following in her footsteps then she shall not have suffered in vain. A virile nation must remember that work is an ennobling thing.”