INFLATION

Rotorua Morning Post, Volume 3, Issue 630, 7 September 1933, Page 6

INFLATION

CECIL H.

CLINKARD.

(To the Editor.) Sir, — In view of the frequent demands for currency inflation with the avowed object of raising prices, I think it may be of interest to your rtaders to be informed as to the opinions of some of tbose who have special knowledge of this and kmdred subjects. During tbe war infiation> took place in the United Kingdom to a very large extent. Mr. Robert King in "Banking and Currency" says that in 1914 Trtasury bills amounted to £99,000,000 and in 1919 stood at £1,107,000,000 while Treasury notes increased to £367,626,000. Sir Josiah Stamp says: "From 1914 to 1920 Great Britain's total expenditure was £11,286,000,000 of which she borrowed £7,196,000,000. During that time (6 years) her expenditure exceeded the aggregate of the previous 226 years. By 1920 be says, prices rose to 325 as compared with 100 in 1013-14. Further that when National expenditure of borrowed money came to an end in 1921 prices fell by half. He continues: "The whole process of inflation has been to produce wild extravagance and laek of proportion between different types of expenditure. Regarding Germany, he says: — "Prices by the end of 1919 rose eight times and 17 times by March 1920 and so on 34 times in 1921 then to 19,000, 74,000, 944,000 and then to millions. when a new currency was invented founded on gold. France went through much the same in 1790 and again after the late war when beginning with an increase of 25 per cent in her currency priees •in 1918 were up to 350 compared with 100 in 1913-14, 1920 (587), 1925 (632), 1926 (836), then came devalua'tion .at five times the paper franc formerly worth lOd became a gold h'acked franc at 2d. While I was in Wellington recently I examined the League of Nations' report of speeches delivered at the recent World Conference. M. Bonnet (France) said: "In France and even more in other countries the public had tasted .the bitter fruit of inflation. To public opinion it was vital that such rislc should not ag&in be incurred." Herr Shuller (Austria)' said: "Austria had already tried the experiment of raising pxdces by inflation; she had succeeded by increasing the normal | value of goods by 15,000 times. She I had therefore the soundest reason for j mistiusting tbe solution of raising i prices by inflation." M. Masaryk (Czecboslovakia), re- ! ferring to the generous experiences in j the matter of inflation in Central Eur- j ope pointed out that any allusion to them would disturb public opinion in ' that part of Europe. | Herr Berger (Germany) said that in view of Germany's past experience j in currency 'inflation or instability the ! Gennan delegation attaehed the greateste importance to speedy stabilisation. G. D. H. Cole says: "We must beware of tbose suggested remedies for our economic trouhles which hold out to us, the hope that all will he well as soon as the nations of the world adopt this or that particular nostrum as the foundation of their banking policy. iJust so must young New Zealand I burn his small finger before he can be taugbt the danger and to shun the fire. — I am^ etc.,

Rotorua, September 5. i