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Hokitika Guardian, 26 February 1924, Page 2

Tim economic situation the world over is a subject of absorbing interest. Indeed it is a problem the end of which it is confounding to work out. IT is being weighed in many balances and always found wanting in some material matter. A iinaneial expert in the United States writes learnedly on the subject of currencies, which, of course, are the foundation of a nation’s solvency. Tlio article proceeds: - The paper money madness which has possessed Europe since the war has about run its course. Tn every country the people are tired and sick of the worthless currency and the fluctuating; prices which aueonipany 'its use, but the governments are not all courageous enough to face I lie conditions that go with a sound currency, to wit: that public expenditures must he met by taxation, that all public business shall be conducted upon ordinary business principles, that governments shall get ml of superfluous employees, anil that business generally shall adapt itself to a stable standard of value instead of relying upon a constant stimulant in the form of rising prices. The main trouble is that during the war and since people have formed the habit of relaxing to adjust themselves to conditions which they regard as hard oi unusual and of appealing to governments for relief. The war has created a gieat many conditions that are hard and unusual, from which governments ••an give nothing but temporary relief and that of a fictitious and economically unsound character calculated to prolong rather than remedy tile evils. Ignorance of economic principles on the part of political authorities unwillingness to face unpopularity or fear of revolutionary sentiments among the people, have been responsible for the makeshift monetary policies.

Tin; writer continues that all of tho evils of irredeemable paper currency, issued at tho will of governmental authorities, have, been seen again over nearly all Europe, All of the specious pleas in favor of easy credit for the purpose of overcoming unemployment, raising prices and helping debtors, have been advanced and the proposals tried until everybody lias had enough of them. 'Hie theory that no concrete standard of value is required, that lawfully issued paper, -hearing the stamp of the sovereign power and possessing the legal tender quality, does not need to he convertible into any other kind of money, that gold has no real utility and that its use as basic money has been due to the tyranny of mere custom or the interests of international bankers, hits been exploited in every corner ot Europe, but nobody any longer repeats it. Nobody does reverence to the government stamp over there now. Everywhere the authorities are racking their brains to get some tangible value behind the money. Nowhere did the advocates of paper money originally contemplate such excessive issues; they simply followed the easy course, or what amid the perplexities of the time seemed to them to he temporarily the only course, hut once started they found that the need for each successive issue was more pressing than for the previous ones. Issues of paper money are a stimulant which quickly loses its effect, leaving thu business situation more in need of another dose than it was of the first one.

In justice to tlic European governments it should be said that the. cliiel reason for the paper issues ivit.li thorn I'm been the pressing need for means of meeting the enormous demands on tin- treasuries, swollen by unemployment doles and ihe ineroased cost of all state- services. Nevertheless, the fallacy of all the arguments in behalf of irredeemable currency has been again most effectively ,Exposed. Such currencies do not make money cheap in an\ other sense than that its value is depreciated, so that more of it is required to buy everything. The argil-

meat that they make business good by causing prices to rise is based upon this depreciation, and every degree of depreciation is a step toward the ruin which has been reached in Euroc. where the savings of millions of people have been wiped out, the incentive of thrift has been destroyed, and masses of people have been brought face to face with starvation. With these conclusions in the mind of the American people it. is'not difficult- to realise why Annriea stands aloof from Europe" m its extremity. There is tho need for file people of the Continent to help themselves, before they can look outside for help. And until the selfhelp move is made in a legitimate way. the United States will remain outside ! the sphere'of European reconstruction, and be content to advise only towards the recovery of the Continent.