The Guardian (And Evening Star, with which is incorporated the West Coast Times.) TUESDAY, NOVEMBER 6th, 1923.

Hokitika Guardian, 6 November 1923, Page 2

The Guardian (And Evening Star, with which is incorporated the West Coast Times.) TUESDAY, NOVEMBER 6th, 1923.

CTIiRKNCY INFLATION. Ccrhknty iii tl ution in Germany has readied and) a point and the economic effect is so serious that it seems almost impossible for the country to recover without wholesale repudiation of all liabilities involving the complete destruction of any measure of value now possessed by the paper mark. Figures which indicate the height readied by currency inflation in Germany are sc bewildering a« to be almost incomprehensible. The Reichsbank statement made up to August 23, says a financial critic, shows that in! the week covered bv the return, the note circula-

tion increased by b"i7J billion marks to j radically 274 billion marks, having in fact more than doubled in seven days. Hie gold held against ibis is a -tenli'y diminishing i|iuintity, now amounting to little over 500 million (gold) mark*. Further. Ceruumy’s limiting debt on August 31st.. amounted to 1.235 billions of murks, .showing an increase compared with duly 31 of f.lOl billions. \s pointed out in die last monthly circular of one of the big London banks, one of the results of inflation carried to such lengths, is that the various uses to which money is ordinarily put are to some extent separated and performed bv various qtiiu.< distinct emergency monetary instruments. The first stage reached is the practical abandonment of the inflated lUm-ney as a medium of exchange in foreign trade. Thus, for some time past, scarcely any trade has been conducted with German importers and exporters on a mark basis, though, internally the use of Iho depreciated currency in exchange may continue for a mueli longer period. The inevitable consequences in the shape ol the impoverishment of the greater part of tin 1 community, resulting in discontent which frequently bursts into open revolt, demonstrate the need for the utmost caution in the u-e of so dangerous a weapon »s currency inflation for any purpose, eennomie or political. Naturally the value of the paper mark lias declined as tlio amount issued has increased. with the result that lost week the German exchange touched lf>s million marks to the £, that is to sriv. an English penny became worth not far short of two million marks. The exchange quotation, however, is now largely meaningless, and the time cannot be far distant when it- will be impossible to obtain any rate at all for the existing paper mack. Although inflation in Hermaiiv has al'eady gone so far that stability of the currency may lie regarded ns almost impossible, ii is satislin loiy to note that the Currency (■-immitlee of tin- Eemuimie Council in Germany have made definite proposals with a view in bringing about

a better .-late of affairs. The nest important ;, toi os'it ion is that- alter the maximum ol tin; note inflation ha* been fixed, a fund shall be lormed consisting of the Reii'lisbank gold and the foreign exchange obtained by moans of (he new compulsory order, and increased if necessary by foreign loans secured on mortgages on teal property. Caper marks jn . i e ulnt ion <•' > n !<1 then be exchange! f'..r cold rules, seemed on the funds a ’indiug to the rate tor the day. l-ivid Mttly. according to the 'Times’ correspondent. t ! 'e main idea is t o get together a liittd. tt pail ol which could

I.- used for intervention in tlio excltange market. 1 lie balance, togetehr with the Hoiolishaiik's remaining golo levy VC, could !e used lie the '"eatioi; ol a Stable nolo. This proposal lias been already criticised eu the grounds that it is unlikely to have, the Highest oil’cet on any but. the mc.-i iiinuina! holding- of foreign currency, and in any case tic- liiliicultii's ahead "I Do: many, even if the Reparations problem should be satisfactorily settled, are t.t < meiidI ill s ■