1931-05-27 — Page 2

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THE

HONGKONG

"THESE MONEY

THEORIES."

TELEGRAPII, WEDNESDAY, MAY 27, 1931.

the quantity theory" of money. He said: "While price changes It is based on the well-known in single commodities, or in a maxim that nothing succeeds like number of commodities, may be excess. It acoks to prove that due to the ordinary play of supply "other things remaining constant" and demand, universal or general MR. C. CHAMPKIN ADDRESSES-which, by the way, they never price changes are only to be do"price levels vary directly accounted for by changes in the with the supply of money." ROTARIANS.

Ja price equation of money"--that is, nther words, when money is the real value of gold, plentiful commodity prices riso Under our imperfect system the and we find it diflcult to live real value of gold in a gold stan within our means.

On the other dard country Is ragulated-or, sa hand, when money is-scarce things some say, is wangled-by aro so cheap that we find it impos- interest, and, of course, to a cer- sible to spend our earnings. As tain extent by eggs as I shall

matter of experience we find presently explain.

PRACTICE & THEORY.

Mr. C. Chumpkin was in his usual witly form at yesterday's meeting of the Hongkong, Rotary Club, held at Messrs. Lane Crawothing of the kind! ford's restaurant, when he held forth on muney theories.

When the gold stocks of Eng→ land were depleted after the war,

Burden of Interest.

I have spent the best years of as a result of the unfortunate my life trying to And out who dcelaion to restore the gold

Interest and why.

The Chairman (Hon. Mr. S. standard at any cost, we did not invented

live abroad.

T'so) announced that a binckwood mallet had been presented to the find it more economical to live in interest is the super-illusion of the therints. In more enlighten: Club for the Chairman's use. England than in France thated times the Roman Church con bore the Rotary emblem and was teadly accumulated the gold that demned interest as a crine com the property of the Club, for England lost. On the contrary it

parable only to murder. Up 10 which they thanked the generosity became considerably cheaper to 1571 the charging of Interest was of Mr. Shielda.—(Applause).

A criminal offence in England. We find the Chairman of the very much doubt if it in quile Visitors welcomed, In addition to the speaker, were Mr. R. H. Midland Baak telling us as recent-legni now, for there is

sound According juristic authority for the principle Miriams, Hongkong Excavation as a mouth ago Company; Mr. F. R. Baxter, 10 nur experience of the working that when a loan is made the pro- HMS. Hermes; and Mr. C. I of the gold standard the flow of herty in the thing lent for the

into creditor conatries Endert, of the Hongkong Dutch Fold

to the borrower. time being passes should have chased an expansion This was reaffirmed as

late as Bank. Three Rotarians from.

of money supplies. The stimulat. 1926.

ft man How then can Singapore were also welcomed,

Laing effect on prices would in turn demand interest from another whe these being Mr. Lawrence ler, Dr. Lim Han-hoe and Mr. 11. have enabled debt auntries to merely using that which is his

disposs of their Hutchen, also Rotarian D. Sparn-advantage, but in fact the move- products to better

Own? To charge interest is to way, of Bandoeng, Java,

time and who can claim nient of gold has had 1302 In addressing the gathering effect. As a sequence Fran dan will charge interest on a

uchownership in time? No Mahome Mr. Lawler said that Mr. Hutchen has offered as ifle resistance to lie will necept auto, or commia- alud himself had had the privilege the fall in wholesale prices as this gious, or anything else that brings of attending the first meeting of country, which has received in a better return than The Hongling Cins, In Singapore accession to its stock of gold. could hope to get, but he will not Any infidel they had often had the privilegis clent, therefore, that the gold charge interest, and very rightly of entertaining members af

the cl

standard is not working at w unticipated."

Hongkong Club, which, judgin by the attendance, was very suc

essful Singapore sent their Best wishes.

Mr. Sparnany extended beat wishes on behalf of his Club in

Java

110.

loan.

Not only is interest clearly immoral, decidedly illegal and devilish inconvenient, it it is

unnecessary. Let quote in support of this view the classic case of the Guernsey Ment

Well, of course, it is quite pos sible that the maid standard totally, suddenly developed an inexpll- cable kink, but it in. ad" "least. equally possible that the whole

Market.

Something for Nothing.

!

theory is wrong began it runs In speaking on "These Money counter.to the fact that commodity Theories," Mr. Champkin said, prices are not generally an effect

A hundred years ago the F foel rather diflicient about of money supplies, hot more fre

hourgeoisie, or addressing you on the subiect of quently

The quantity hurgesses or A cause. these may theories because i ant theory deeply entirely on the whatever the purish council of sorry t

to say that I am rapidly Flementary law of supply and de- Guernsey call themselves-decid- losing the faculty of regarding mand as it affects inney and it ed, on a sunken impulse, to create. Now, money from the viewpoint of presupposes that the same law an artistic Meat Market. theory. Money presents peculine governs conmodities, but it does creative art, an you know, is usual- nspects from certain angles and 12 | not. It affect them or most of has been my lol to regard it some-them but it dors not govern what directly from an eagle of my them. own. I am not, of course, so 112- reasonable as to hold that all doe- trimire theories about money are

rong merely because I know that me of them are right. The most I hope for, in the few minutes at my disposal is to lead you to a more kindly appreciation of that simple truth 6 well expressed by Mr. Henry Fard- "All theories art

་

Real Value of Gold..

the outcome of a community's impulse, but this particular Meat Market was the impulse of the community's income- or rather of its lack of income. They needed funds and a Meat Market seemed

The governing factor in eo- modity prices is the real value of promising way of getting some. gold in a gold standard country. The difficulty was that they had and of silver in a silver standard not the money to pay for it and country, but if we elect to regard they could not even raise enough gold as a standard we have to money to pay interest on a luan.

In these rather trying circum- invest it with an artificial value.

good sense | When we assume that a stable stances they had the

consult a gold standard stabilises prices we to

shrewd exchange Let us examine, in the light of are assuming something that is broker, und following his advies The relation- they issued three thousand one- recent events, oney particular self-contradictory. become rather obscured and see it dities is a matter of comparatiach note would be destroyed as aspect of money that has latterly ship of gold with other commo-pound notes and made them legn Lender, with the provision that we can put to the test of experi.not of absolute values.

was received by the Council in ence a beer that is even now way to stabilise prices is to estab accepted as gospel by people who ish fluctuating standard for payment of rent from the Market Within five years are young mouth to know better. Kal. De, if our credit is sufi-stallholders. We all familiar with that ciently good, we enn operate on notable fallacy cuphuutiously term "naked" currency of paper, theory" of controlling Our supplies, not by

the 212013093

it

The only

The last of the notes had been paid in and destroyed and Guernsey was possessed of the artistic and

. with it has our metallic reserves, but solely solidly built Ment Market thal:

by the needs of the market as in- licated by the rising or falling tendency of our index number of prica levels.

stands to-day a silent witness to It earns the infamy of intereal. three hundred pounds a year and it cost nothing to build.

News travelled slowly in those days, but when this thing became known something akin to punie This

1

10

to "nd

their Leamer ceonomists

Angel

of

Death..!

FLIT

Kills

Germ-laden harbiy- gers of disease, Flies are the black angels of death to you and your children. Kill iheni. Spray Pill. Für in elendly to files, mosquitoes, roaches, · flean, mothe, aside, hed

and their *huga," cago. Docen't strīns, Don't confus Fli with other. Insecti cides. Look for the soldier on the yellow can with black barsel.

FLIT

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bred content and as a bright and hatty topic for discussion after an excellent tilin on a hot day nothing could be more pleasia? than the quartity theory. Yet in I do not mean, of course. that experiencr

in the name we give wheat, judged by a comparative to our mistakes we should have tandard, would maintain its price enough practical knowledge of i in a year of exceptional crops, nor seized the money theorists. to marvel that it still survives, that silver would fail to respond handful of parish councillora- The quantity theory was perhaps un artificial restriction of out-half foreigners at that had cast best expressed by Dr. Johnson--- | put, jut.

law of supply and flown the idol of interest that men long! Fenerally identified 05 "the demand is not discredited by ahud worshipped for so

It will They had violated the sanctity of You will comparative standard, eminent lexicographer." remember that when he vuited always have, some effect, hat the every renomic tradition by ret something for nothing! Scotland he brought back with governing effect on general asinar

from distinguished him two very remarkable addi-

partionlar There tions to our knowledge that hive commodities, will always rest an rasenlity had a profound bearing on the the real value of gold. You have wrote theses on the Guernsey Rent Market and other learned science of economics for more daily illustration of this fact

in Chim than a century.

where conditions are economicts have written other The first, of course, is the know.reversed. Here we have a silver theses at regular intervals since.

and gold standard

is is general For a century the theorists have ledge that it is possible for an emmodity. When your exchange tried to prove that there was a Englishman visiting Scotland to bring back anything at all! broker tells you that gold bars are catch in it somewhere and for a (Laughter).

which I fear he has been century the good people of Guern The second is con- tained in an entry in his Journal, telling you with monotonous resey have simply replied "Well, "Eggs are four pennies a score,vularity lately-what he really nyhow there's the Meat Market:" will probably have something to Bay with regard to the settlement is that silver is down. not because eggs are so plentiful cant

Lord Passfeld's Views.

of our own currency problems when the in this wretched country, but because gold bars in China are

Now, we in Hongkong are no!

recently-departed Currency because pennies are damned almost entirely unaffected by the

Commission this Colonial altogether disinterested in law of supply and demand.

Mr. Roberts, of the National Mont Market affair, because. Dan presents its Report a few years City Bank, presented this idea of the learned economists who has hence.

scarce."

50

How Theory Goes Astray. Here, in a nutshell-or perhaps I should any in an egg-shells

SALESMAN SAM

HAVE YOU TOM SAWYER.

| BY HUCKLEBERRY FINN?.

BOOK CEPT

ند

Yess R

HAVE!

We

concisely in the course of a attempted to explain it. is Lord recent address to the American I'assfield, a formier prominent Institute of Mining Engineers, member of the Fabian Society who

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(Continued on Page 11.)

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