WAGES AND CURRENCY.

Taranaki Daily News, 9 January 1920, Page 7

WAGES AND CURRENCY.

The future of war bonuses is, says the Industrial Peace, mainly a question of currency. The advances granted during the war to meet increases in the cost of living were but modes of in'flating the currency. Moreover, they intensified the evil which they were designed to meet. They did nothing to remove the shortage of goods upon which the general standard of living deTo call £1 in gold £2 in paper does not add to the supply of wheat, coal, and other necessaries. There was no gain to "labor" at the expense of "capital." If it be granted that when normal production is restored some real improvement may be enjoyed by labor through advances in money wages, it is obvious that such improvement is not necessarily measured by the latter. For the rest, "the future of war bonuses is clearly a currency question. Further, it is clear that the Government is not omnipotent in the matter. Currency is nn international affair, and the attitude of one State will be largely determined by the attitude of other States. In the improbable event of one State taking measures to perpetuate war bonuses while other States aimed at a considerable contraction of currency the external trade of the former would be violently disturbed, and would remain so until the work-people accepted such a reduction as would bring their wages to a '•competitive level." Without such a reduction exports would vanish, and imports, being unpaid for, ultimately cease. ( ; ndev certain conditions which need not he closely discussed, two sets of prices would emerge, gold prices and (higher) paper prices. Workpeople might conceivably retain high wages paid in paper money, but these would represent far lower wages measured in gold.