Basis of Monetary System

Manawatu Times, Volume LIV, Issue 7282, 9 October 1933, Page 5

Basis of Monetary System

(To the Editor.)

Siir, —Mr P. B. Fitzhorbert refers to a monetary system based upon goods .and services, as something delightfully vague. Ho says it is absolute nonsenso classifying “goods and services” together as commodities and issuing a monetary ratio on this basis, whilst be agrees that to issuo money as a measuring machine to distribute goods in return for services would be true equation to natural law. Anything more delightfully vaguo than this is scarcely imaginable. One cannot produce goods of any kind without services, and there is a vast amount of service which does not produce any goods whatever. They are indissolubly joined, and they are “all consumers of goods and services.” It would bo a very difficult matter to find a way of issuing money to services only, so that goods might recelvo their due via the media of services and for production to get all the money to issue to services, as now, will only perpetuate and aggravate the present evils, which I know is not the desire of Mr Fitzherbert.

A monetary system or something equivalent is, however, necessary as a medium of exchange, and the Douglas proposals “to induce consumption by issuing purchasing power to equate with the power to consume” (production has no known limit) is something which deserves investigation and a judgment not biassed by any convictions in favour of earlier “cures” imbibed prior to the advent of the Douglas principles, which are sane, and adaptable to overcome the ever-increasing march of science and mechanics in their accompanying effect of Telegating to the scrap-heap, unprovided for, the workers whom it will continue to displace. I quite agree with all the. remaining part of Mr Fitzherbert’s letter, which is in accordance with what I have written and which is not in agreement with the meaning conveyed by the paragraphs 1 and 2. I am, etc., MANCUNIAN. Palmerston N. 7/10/33.