Empire's £'s Are Out

Of Balance Fantastic Results of Interference With Economic Laws

THE attempts of the Australian Social ist Government to keep control of the national economy under the chaotic conditions produced in the world by World War 11, are having fantastic results.

For example, as everyone knows, the value of the £ Sterling is a very un certain quantitv it is, if anything, steadily falling. But the financial moguls of the Empire are trying to hold it at a fixed lvalue in relation to gold, and in re lation to the Dollar. The Australian £, which is valued in terms of gold at 25 per cent, less than Sterling, is steadily in creasing in value.

These things are the result of simple economics. Britain is buying more than she is selling and is not only using up all her money reserves, but is actually getting into debt. Therefore, of course, the unit of her monetary system (the £ Sterling) is decreasing in value. Aus tralia, on the other hand, is selling far more than she is buying, and is getting richer every month her credit balances abroad (except in Dollar areas) are large, and are steadily increasing.

It is ridiculous that the Australian £ should be valued at 25 per cent, under Sterling and the proof of it is seen in what is haopening in free exchange markets of the* East. In Singapore, for example, the Australian £ is at par with Sterling. Shrewd people to-day are en riching themselves rapidly by taking Aus tralian £’s to Singapore, converting them into Sterling at par, and bringing Ster ling back to Australia, or to some other controlled exchange market, where they are converting it back into Australian £’s, and getting the full benefit of 25 per cent.

Or take gold, of which Australia and her Territories (especially New Guinea) produce a great deal. Oh a free market, gold is worth a good deal more than the £lO per fine ounce which is the value fixed in Australia’s controlled markets.

There is a black market price for fine gold which is very much greater. In London recently, for example, gold buyers were publicly offering £37/10/- Sterling per ounce for fine gold, for the purpose of making wedding rings.

These are outstanding examples to prove that economic laws cannot be interfered with on a half-and-half basis. We either must let trade and commerce run en tirely free throughout the world, sub ject only to the laws of supply and de mand, and of competition (with proper safeguards, of course, against monopo listic organisation) or we must put all international economic relations under strict control, in the manner planned by the Communists.

The present fumbling efforts of the Democracies to control world-wide econo mic conditions and international finan cial relationships reminds one of Aesop’s Fable about the monkey and the cheese.

The monkey put two pieces of cheese on a balance and tried to get them exactly even. Greedily he took a bite of one; then he found it necessary to bite at the other; and so he alternated between the two lots of cheese until he had consumed the lot.