PAPER MONEY

Hokitika Guardian, 26 January 1931, Page 2

PAPER MONEY

THE OLD MIRAGE

RUSSIA’S EXAMPLE.

Our Australian experiment in economic control is now within, sight of its goal and the true believers are spurring -the jaded steed to a last great effort to reach it. Long ago they made the local market safe for manufacturers. Then they devised the ‘new’ protection and took the.workers under the wing of the State, forbidding any employment—at least around the towns —■except at wages held ‘fair and reasonable. 5 Some of the country dwellers ‘bucked 5 at this. So the Australian world was made safe for sugar, butter, and raisin producers. Prices for all these were to be ‘fair and profitable,’ too. It is the wheat farmer’s turn next and signs are not wanting that meat is to follow after that.' Then all production prices win be under total or partial control (says a writer in the ‘Sydney Morning Herald 5 ). It has cost something to build this paradise. As we were ill-content with the prices our wares and service* (brought in the world’s markets we added what we could borrow to what the world paid of its own accord. And that addition has accumulted steadily, with an annual interest bill that must come off the voluntary payment for our goods now that borrowing is Still )ve are not going back to ill© miaernible pittance the world outside gives for things. Wo will mak« up the difference, if we must, by ‘pledging the credit of the nation.’ or, in plain English, by local promises to pay. In these we shall pay the fair and reasonable thing, trusting to our future energy and good fortune to maintain their value. Have we good reason to count on success in this all-round maintenance of local prices? Why not? We shall soon have taken charge of all phases of Australian industry. May we not count on the successful management of each?

IN RUSSIA. It is not as easy as it sounds. They have all these controls, and producers' councils in Russia. They have nationalised -credit, with a ( State Bank managing the not© issue and a Commissariat of Finance looking after detailed advances of every Government Department, producers’ co-operative and trading trust —just the scheme ,or finance that the measures before our Federal Parliament would set up. With a mighty enthusiasm the planning commission of that nation, free cf the “bondage” of foreign debt, has led it to a five years’ , attack on the country’s need of better railways, iron arid steel works, the mechanisation of agriculture, modernised coal mining arid cheaper goods for all. Russia is not without resources,. She has abundant land of the richest quality, coal, iron, gold, silver, oil, timber, wool, cotton, flax, waterways—she is a not so small edition of the man world itself, Her leaders have had elbow-

room find perfect- peace l in which to - work out this grand experiment of pay* ing each worker and peasant a- fair •thing and dove-tailing their services in due proportion by the orders of a supreme economic council. But now it seems that even on that fair field the grand experiment is collapsing 'once more. The oil) old trouble with paper money.—over issue —has happened again. There have been signs for a year, or two that the production of food, fuel, clothing, and shelter was not being maintained at levels equal to the needs of a population growing by three and a half millions a: year. One can picture the difficult job of the Russian leaders. Their Union of Socialist Soviet Republics is, in effect and intention, a single concern under unified management. It has it 9 own finance commissariat to see to it that every shelter shall have credit and each buyer cash. And each manager of a tmst or department, whatever else he does, must pay wages.

THE FIVE-YEAR PLAN. The five-year plan was intended to bring down prices by re-equipping every industry on modern lines with the best American technique. No means have been spared to speed up that equipment. Iron and steel furnaces, electrical stations, tractor and agricultural implement factories are rising. Yet every effort is mocked by the effect on prices of the paper money used to pay wages for such things. The roubles in circulation—paper, silver, and copper—have nearly doubled in the last twelve months, rising from 2G42 million on Ist October, 1929, to 4750 million at the beginning of Sep*tember last. The official rate of excl ange i 9 still one rouble at 2s English money. It is illegal to give more than a rouble for an English florin, either at the frontier or inside Russia. Yet illicit dealers will gladly give 60, 80, or even a hundred paper roubles for a pound note. Official index numers claim to record both the controlled prices at which the Soviet trusts and the co-operative stores sell to those holding *rat»'on tickets and fonuits. and the prices paid in the “free” but not always open markets. From the nature of secret trading and from the illiteracy of the peasants this claim is highly unlikely to be true to fact. The worker’s ration of houseroom has been cut down of late from 8 square metres to 6 per person (6£ square yards). Shortages of clothing are not remedied "by duties ranging from 1000 to 3000 per cent on private importations. All the symptons are in evidence of another plethora of paper