AN HONEST SOVEREIGN.

Hauraki Plains Gazette, Volume XXXIII, Issue 4446, 28 July 1922, Page 3

AN HONEST SOVEREIGN.

NEW BASIS OF CURRENCY.

VALUES OF STANDARD commodities. “Money is even more a public utility than streets and roads. Our only hope to avoid being swamped by the low wages and low exchange products of Europe is to give our producers easy money at long time and low interest, before pur competitors take the markets of the worjd from us." Quoting the words of an American financial authority, as above, the president of the Farmers’ Union (Mr W. J. Polson) gave them a local application in his address to the annual conference at Wellington on Tuesday, and made some interesting observations on the necessity of arriving at an “honest” basis as to the purchase ing power of the sovereign.. The idea of the new school, of American economists is t» base she dollar or the sovereign on a selected list of the standard commodities of the world instead of; upon gold. The American Bureau of Labour makes * such a list, comprising 300 commodities, and calculates the average quantity used by each individual. If this quantity is multiplied by the price a base figure is arrived .it which, if averaged throughout the 300 artic es, gives an index number which becomes the basis of the sovereign. If tjhis nidex number remains stable the operation is simple, and if the If. this index number remains stable more or less goods to be purchased with the standard sovereign, all that is necessary is to decrease br increase the legal amount of gold which constitutes the sovereign. The result would be an “honest” •sovereign which would retain its purchasing ability.