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Full text of "War-time financial problems"

300               MONEY  OR  GOODS?

Any other commodity that earned this quality
of universal acceptability could do the* work of gold
just as well. But until one has been found, gold,
as long as it keeps that quality, holds the field.
And bankers use it as the basis for money and
credit, not because, as Mr Kitson says, they selected
it owing to its scarcity, but because this quality of
universal acceptability made it the thing in which
all debts, both at home and abroad, could be paid.
" Given/' says Mr Kitson, " a self-contained trading
community with a certain quantity of legal tender,
just sufficient for its commercial needs, and it makes
no difference either to the value or efficiency of the
money or to the trade affected whether it be made
of metal or paper/' Quite so, but trading com-
munities are not self-contained. Their currency has
to be convertible into something acceptable abroad,
and that something is, at present, gold. It is possible
that the world may some day evolve an international
paper currency that will be everywhere acceptable.
But such an ideal requires a growth of honesty and
mutual confidence among the nations that puts it
a long way off. And how is its volume to be
regulated ?

This question is all-important, whether the cur-
rency be national or international. Mr Kitson
speaks of a currency " just sufficient " for the com-
munity's commercial needs. Who is to decide when
the currency is just sufficient ? The Government ?
A sweet world we should live in, if among other
party questions, Parliament had to consider multi-
plying or contracting the currency every year or