PAPER CURRENCY

Southland Times, Issue 18856, 23 June 1920, Page 2

PAPER CURRENCY

NATIONAL DEBTS AND TAXATION. “The world’s paper currency has increased 600 per cent, since the beginning of the war, while the gold reserve, acording to a summary issued by the National City Bank of New York, has increased by only 40 per cent.” said Mr Harold Beauchamp in his address at the annual meeting of the Bank of N.Z. The face value of the paper currency of 30 principal countries of the wbrld aggregated £1,450,000,000 in 1914, £8,000,000,000 at the date of the Armistice, and 10,000,000,000 in December, 1919, exclusive of the £6,800,000,000 of paper money issued by the Russian Bolshevik Government. Meantime the- Bank deposits and consequent use of cheques as a circulating medium have increased, and the world National Debts have grown from £8,000,000,000 in 1914 to £52,000,000,000 in 1919. In the Allied Group, notes in circulation in July, 1914, amounted to £982,440,000, and in December, 1919, to £5,918,200,000, while gold reserves were £752,000,000 and £1,014,200,000 at the respective dates. The note issue of the Central Powers in July, 1914, was £239,400,000, and in December, 1919, £3,754,200,000, and gold holdings respectively £119,000,000 and £65,400,000. The note issue of neutrals in July, 1914, aggregated £233,200,000, and in December, 1919, £484,200,000, while gold reserves were respectively £103,200,000 and £290,200,000. “After the Napoleonic Wars the National Debt of Great Britain was equal to £45 per head. The average debt per head to-day is £l7B, nearly four times the burden laid upon the country after Napoleon’s defeat. Against this present day indebtedness there are, of course, some assets to be set. To her Allies and the Dominions Britain has lent £1,700,000,000. Of this, however, about £600,000,000 has been advanced to Russia, and this may presumably be classed as a doubtful debt; of the balance, she will be fortunate if she recovers 50 per cent. Before the war the British nation was undoubtedly saving money, and every year had a surplus of nearly £400,000,000 to invest. The aggregate of its wealth was estimated to be at least £17,000,000,000. Against this Britain has had to raise a national mortgage of £8,000,000,000. It is estimated, therefore, that she has borrowed up to 40 per cent, of her accumulated heritage. In a normal year of peace Britain must raise £400,000,000, or more than double her pre■war revenue, for the service of the war debt alone —that is, for interest on the War Loans and the sinking fund of 4 per cent, connected therewith. Facing taxation of, say, £1,000,000,000 annually, Britain is back again at the Napoleonic standard of taxation.”