GOLD STANDARD IN N.Z.

Putaruru Press, Volume VIII, Issue 352, 21 August 1930, Page 1

GOLD STANDARD IN N.Z.

ADDRESS TO FARMERS. The Position of Banks. In order to give those present some idea of the type of lectures given under the auspices of the W orkers’ Educational Association, Mr. F. B. Stephens, B.Com. tutor-or-ganiser for the Waikato district, gave a brief address on the “ Gold Standard in New Zealand ” to the members of the Matamata branch of the Farmers’ Union at the August meeting. Mr. Stephens said that at first thought the question of the gold standard might, seem rather distant to farmers, but he suggested that money and its control was of vital interest to the farmers and community in general. The idea that behind every bank note issued by the banks there was a golden sovereign was general, but it was erroneous. The notes were not necessarily backed by gold.

At the conclusion of the war the output of gold had fallen, and the general trend was a fall in prices. Some economists say that unless the currency system is changed they will continue to fall.

After referring to the creating of money by England and Germany by means of the printing press, Mr. Stephens said that after the war England had burned notes to the value of one hundred million, money which had been collected in taxation. In New Zealand the banks had power to issue notes to. the value of security held plus coin and bullion, with the proviso that the coin should be at least one-third of the value of the total notes. The banks in New Zealand had the authority to flood the country with notes by the extension of 13 million notes. The profits of the banks were in inverse ratio to the condition of New Zealand.

The speaker opined that one of the reasons for the collapse in Australia was the multiplicity of banks in that country. There was no other country where private institutions could issue bank notes as was done in New Zealand. In all other countries the production of money was regulated by Government. Personally, he did not believe in a State bank, as it would have to do the same as other banks. There was need for a control of money in New Zealand. He believed that there was the need for a banking board divorced from politics and able to call in the help of the best brains—economists and bankers. Mr. Stephens concluded by expressing the opinion that the time had arrived when the suicidal policy of strife between the banks and the primary producers should be ended.