GOLD

Rotorua Morning Post, Volume 2, Issue 406, 15 December 1932, Page 6

GOLD

E. Earle

Vaile.)

CURRENCY BACKING THE SGUNDEST BASIS FOR MONEY AND' . CREDIT. PRESENT WORLD CONDITIONS ( Sneciallv Writ-en for the "Morning

Post" by

Although money is of such importance to us all in the transaction of our daily business, be it great or small, it is .astonishing how few people have any idea of its true nature — how'it ig created, and how it functions. Much misconception 'exists many misstatements are made hy f addists, and much abuse heaped on gold — a most inoffensive metal having no will of its own either good or had, but dependmg for its effects entirely upon the wisdom and virtue or the folly and vice of those manipulating it. The Purposie of Money. Money is the oil of commerce. Its purpose is to facilitate exchange of real wealth-goods. But it lias no value in itself. Away from goods, money is valueless. There is the wellthe desert who eagerly picked up a linown story of the man starving in bag, but disgustedly cast it from him, saying, "Gold! I thought it was dates!" The attempt o use gold not as money, but as a commodity has been one of the main causes of the world's distresses. It has completsly upsefc the financial apple-cart." Some countries have more gold in their vaults than they can use, and this might just as well he put back in the mines. Other countries have far too little for the safe conduct of their commerce. The Money Illusion. While it would be absurd to belittie the importance of money, it should always be rememhered that in itself it is not to be desired. Hoarding of money — either metal or paper — if practised extensively, is an unmitigated evil. People such' as the inhabitants of India and the French, v who habitually hoard gold and other i'orms oi" curreney, are a great financial nuisanee. reople are far too j/rone to think in money instead of thiuking in goods. For instance, it is by no means necessary that the labourer should have 14 pieces of silver put in his hand every day. What is necessary ig that he should have food, raiment and shelter. If he can acquire the same quantity and quality of" these for four pieces of silver, he is just as well off. A lieavy issue of curreney ig not necessary, and too extensive credit rnay well hecome a uangerons nuisanee. Nature of Money. It has been truly said that anything will serve as money provided it is generally aceepiable to the communily. At various times and in various piaces, shells, tobacco, cattle, slaves, riilv, wheat, copper, silver, gold and ourpose. But modern large scale many oiher things have served this business must have the best basis for its money, and it is beeause of its unique advantages for that purpose ffmt gold had displaced all rivals and nad become the basig of practically every money of importance, until the Mupidity of the Americans sought to uma it into an article of trade, instead of a mea.-ure of the value of other things, and the cunning* of the rreucii sought to corner the preeious metal and thereby impoverish their rivals. The Supremacy of Gold. There are many qualities necessary m an ideal money. I will briefiy deal .vitli the mosc important of them. 1. It should have an intrinsic value of its own based on labour of production. In normal times, gold is vvorlh about £4 an ounce, beeause it cakes the same amount of labour to produce it, as it doe^ to produce ££4 worlh of potatoes, timber, iron, mulches, bread — or anything. The true basis is labour. All paper currencios faxl beeause they are not based on labour. There is no more labour m printing a note for £1,000,000 than in printing one for sixpence. Weak and unserupulous governnientg would inevitably print more paper than was justifiable. 2. Portability. — The cost of transport from one place to another where it may be more urgently required must be a minimum. Such things as cattle fail under this test; gold eomplies with it. 3. Durability. — It must not be subject to depreciation of either quantity or quahty. Such substances as touacco fail under this test. Again gold is supreme. 4. Compaetness. — It must be capigble of being easily stored and guarded where requireti. Such goods as salt, grain and c-attle -do not comply vvith this tost. Gold does. 5. Divisibility. — It must be easily divisible nto a number of paris of onual value according to size. Slaves 1 completely fail under this test. Gold iugain complies. 0. Uniformity. — It must have the same value throughout. Sueh things as tobacco fail liere, but gold can readilv be made of an absolutely standard quality throughout. 7. Roeognisability. — Those accepting it must he able easily to recognise its genuinenes? and value. Cattle again fail here; but not only can gold be stamped with the king's head, hut from it;.; "ring," appearance, weight, etc., can he readily identified. It alone stands tuie acid test. 8. Stability of Value. — Though gold is not absolutely stable in value, there is nothing in the whole realm of nature or art which has anything like so stable a value. It cannot be suddenly produced in great volume a5 wheat can. Nor can drought or pestilonce suddenly diminish the quantity available. • 9. Accc-ptability. — Last but by no means, 1'east money to be useful must be readily accepted hy all folk. Many would not want to be bothered with a cow or a slave; m.ost of 'us would be inconvenienced hy a ton of salt; those virtuous persons who do not smoke would not accept tobacco. But all have the auri sacra fames — the holy hunger for gold. Throughout the ages it has been desired and cannot now be displaced. So it will" be iseen that gold has acquired its supremacy as a bqsi3 of values and money from its own unrivalled rnerits, and not, as so miany faddi'sts insist, from the machinations of a horde of banker-robbers. Blanwj^u^hat^ecaus^h^jold

wars and other great crises, it has failed. But that is only very partially true. Beeause from some exceptional circumstances such as the collapse of a bridge or the llooding of the line it becomes necessary to temporarily suspend traffie, should we say that railways were a failure. For instance it has reeently been proved in the public press that the advocateg of Douglas Social Credit, though' their attitude is so arrogant, haven't the faintest idea of what sort of curreney they will offer to the public. Credit Overdone. ■ In my opinion the financial ills of the world ara due not to the adoption of gold, but to Ihe very opposite. We have gofc too far away from, the solid foundation of gold. The credit system has been overburdened. Our houses, our furniturc, our very clotbas, are ;all unpaid for. We buy an ullotment valued at £200 with £1 ^deposit and the balance at so little per week; we crect a house with an advance of 95 per ceut from a fatuously philanthropic, vote-huying government; in it we place furniture got from some trading company on an infinitesimal deposit or often enough without any deposit whatsoever, and we deck ourselves out in i"ur3 or cover our neked-nes-s in pants whicili wear out far faster than our instalments are paid. The sliglitest breath of adversity and the whole bag of tricks collapses. The "values" on which it has been built disappear. Confidjence. What is mainly wanted to restore prosperity is confidence — confidence that our money is good; confidence that contracts will be performed and bonds ilionoured; confidence in our neighhour and in our government; confidence in general honesty, the hasis of all business and th'e foundation ofjall the virtues. It was beeause England's gold money and England's stirling honesty and ahility . were so highly trusted and valued that we so long reigned