The Temuka Leader THURSDAY, NOVEMBER 25, 1886. PAPER MONEY.

Temuka Leader, Issue 1517, 25 November 1886, Page 2

The Temuka Leader THURSDAY, NOVEMBER 25, 1886. PAPER MONEY.

A MISTAKE occurred in onr last artic'e on the Hod. W. Downer's speech i<» opposition to the proposal to establish a National Bank of Issue in Souib Australia. It wbs not Horace Walpole —but bis father, Sir Robert Walpole—who opposed the" Sooth "Sea Bubble." However, a mistake like this could not affect the question at issue. We have shown so far as we hate gone that not one word of Mr DownerV speech bad the slightest bearing on the question he discussed. After dealing with the Sooth Sea Bubble and the Mississippi Scheme, he continued to sty ; " Everyone knows the result of Law's scheme and its utter failure, and yet after that failure Mirabeau made a similar endeavor in 1789, in a form which appeared to the public absolutely safe. During the French Revolution eighty million pounds' worth ot land—the propeny ot the Church—w?re con fiscated. Possibly those lands were nut immediately available as cash, and it was proposed to issue against their value. Now, to all appearances the land was sufficient security for those notes, yet in a few years those notes lost their value." Now, the meaning of all this is that because paper money depreciated in value during the French Uevolution, it must therefore depreciate now. If a man on bis trial for being of unsound mind made use of nu argument of this kind he would be condemned straight away. How any man having any pretensions to intelligence could make such a statement is absolutely incomprehensible, but it shows the absurdities monopolists will bring forward to support their threatened privileges, and it shows the weakness of their cause when they have nothing better than this to back it up. Where is the analogy between a colony with a constitutional fcrm of government, and enjoying absolute peace, arid a country distracted and disorganised in the convulsive throes of a revolution, where no one knew who would rule the next day ? To compare one with the other is monstrous 1 Previous to the revolution France was in a state of bankruptcy, and it was to tide over the financial difficulties that Louis XVI. called the States-General, of which Mirabeau was a leader, together. On the top of national bankrupcy came the rerolution, which drove th« men of money out of the country, and thus the country was left absolutely penniless; or next door to it. Even the revolutionists did not improve matters; they pplit up into factions, end for a time it was doubtful which party would win. Added to this was the fear that Austria, or some other foreign Power, would step in and conquer France ; thousands of men and women were guillotined daily—even the beautiful Queen fell a victim to the fnry of the people, and hundreds were dying of starvation. Who could have confidence in paper money issued hj anarchists like the French revolutionists ? Where was the security ? The issuers ot ibe paper money might be ousted from power at any moment—and, as a matter of fact, they were—and tbeir successors wouli not feel themselves bound by their actions. On the other hand, we have in the colonies a stable Government —revolution is n<-xt. to impossible—and there is absolute security for paper rcoriey. Besides, the fact that pap»r money failed 100 years ago is no reason that it would tail now ; but this point is not worth discussiug a any greater length. The great point which Mr Down' r wanted to prove is that paper money is use less unless the Bank issuing it has gold at ita back. The fact is that in onr commercial transactions with foreign countries nothing but gold is of value, but in our domestic transactions gold it scarcely ever used. Wa are satisfied when a hank-note is handed to us--we do not ask the banker to prove that he has got sufficient gold in the Bank to pay if called on to do no. Now, is the security the Bink offers as good as the security of the colony ? What security does the Bank offer f The amount of capital the ahareholders have subscribed. What security does the colony offer ? Everything ia it, both public and private, including even the capital of the Banks, which is the security of the present notes. The Banks and all the property in the country are liable to be taxed, and anything that is subject to taxation Would go to secure Government notes. Then why Bhould Government notes depreciate in value while notes of private banking companies run current at par ? Such a I thing could not occur; it is nonsense. ' On what security does the Government of South Australia borrow in England ? The security of the taxes raised in the colony. Then if the people of England lend money to the colony of South Australia on the security of the taxes raised in that colony, surely the people of South Australia ought to be satisfied

Hint notes issued on the same security would be good enough. To show that they would not is not easy, and this in what Mr Downer must show before lie can prore that the scheme is not a good one.