Ladies and Gentlemen,

That I distinctly recognise the high honor conferred upon me by the "Australasian Association for the Advancement of Science" when they appointed me President of Section F, is testified by my travelling the distance of nearly 2,000 miles from Adelaide to this city to take part in the proceedings of the Association. That the subject chosen by me would be of interest in New Zealand, I was informed by Professor Hutton when he courteously acknowledged my acceptance of the proffered Presidentship in March last. I have done my best to make the study of the subject simple, so that the general public who are most affected by the want of a State Bank of Issue should to some extent understand the practical bearing of this most important economic question.

The very able and conscientious gentleman who last year filled the chair that I am called upon to occupy to-day closed his presidential address with the following deeply significant words:—"Popular favor is a terrible task-mistress for she refuses bread to those who fail to work her pleasure—but the evil time draws too near for delusive teaching. It is now necessary that those who see the rocks ahead should speak out faithfully." Most of us have heard of the "rocks ahead" referred to by the late Mr. W. R. Gregg, but Mr. Johnston was more farseeing in his treatment of his subject page 2 than Mr. Gregg. In dealing with the very difficult but eminently practical subject that I have chosen I do not pro-pose to defend "pleasant delusions," upheld, as the well-known Mr. Matthew Macfie alleges, by reason of the "credulity and ignorance" of the public mind on the little studied subject of finance. It was announced the other day that on the 20th of November a meeting would be held at the London University, presided over by the Chancellor of the Exchequer, with a view to the foundation of a British Economic Association. The notice alleged that "it was rather an anomaly that no organised scientific body exists in Great Britain to promote that most important branch of knowledge in which we have made more advance than all the rest of the world—Economics." That newly-to-be-formed association will scarcely say of the antipodean institution sequamur sed non æquis passibus. We hope when the great British foundation has advanced beyond our more humble achievements that we shall keep it well in sight.

The Question Constantly Recurring,

and not to be put down till it is satisfactorily answered, is: Does the direction given to labor by capitalists and other non-workers under present conditions induce greater production in its broadest sense, than if labor had free and direct access to the soil, combined with an organised co-operative system of its own? We cannot dissociate the various branches or classes of society. An American publication truly says:—"In these days of labor trouble, society is tempted to forget, in the duty of saving itself, that the poor are also society." A Leipsic journalist wrote:—"The working people are forced to fatten the more fortunate one, who by accident, bad laws, or by unscrupulous spoliation of his fellow-man, has possessed himself of the means necessary for the production of capital." The object of economics is first to discover if such testimony is true, and if so to correct the cause of the wrong. Every individual is a member of the same commonwealth, and if any one class suffers, all others suffer with it till the wrong is removed. From such premises I conclude that we are here for the purpose of considering how the good of the whole community may be promoted, our care being that none are left to want. It must not be supposed that the shortcomings of social and political relations can be rectified at once. Those enamored of a Fabian policy adopt the ancient dictum—Natura non facit saltum. However, during the current century, Nature, aided by the skill of man, has, at his suggestion, made astonishing leaps and bounds. Instead of taking six months to convey by the breath of Eolus the voice of science to the antipodes, the lightning speed of the page 3 telegraph relates what took place the instant before. So we may not altogether accept the voice of the classic legend. I venture to state that this subject of high finance, when not obscured by long-lived prejudice and when the mental vision is not distorted by self-interests, is, after all, not so hard to be comprehended, for, as a home writer remarks, "there is a way of looking at the question which will enable every person of average capacity and knowledge to form a practical conclusion upon it." I submit as true the proposition that "general suggestions are nebulæ, out of which detailed schemes are formed," or as the classic legend, transferred to the entablature of a gas works in England, runs, ex fumo dare lucem. From the smoke that I raise to-day I encourage myself to believe that some light may be evolved.

I ask at this stage of the proceedings to be allowed to overlook the

Huckstering Process of Money-Changing,

sometimes called "money-making," in which the uppermost, and so often the only, question is:—"How much shall I gain in this transaction from the labor of others?" I propose to consider, briefly as I must, and as clearly as I can, that essential question in social economics, the

Dynamic Agency of Money,

as contributing to the comfort and well-being "of all sorts and conditions of men." With this view, I must not raise myself, as if to the apex of the social pyramid, by means of a balloon, only to descend more quickly than I went up; but begin where the builders do—on the bed-rock—and, by a steady aim, raise the superstructure. I must discover where the use of money first comes in as an aid to labor and in the necessary distribution of the products of labor. It goes without saying that the sole source of human activity is the food supply, and the maximum of result is obtained when every member of the human family is usefully employed, each one according to his ability—a quantity continually to be increased by the exercise of proper technical instruction. I ask that the total food-supply of the population of the world shall be taken as a unit, and that the sources whence it is obtained shall be noted. This total supply is gained from the soil and from the sea by no other means than by the output of human labor, and ought, from year to year, to be equal to the sustenance of each individual for the entire period. If each individual were so located that he planted upon and gathered from the land or gained from the sea his own food and no more, and was content to make his own clothing and construct his own dwelling from materials raised or gathered by himself, there would be no place for money, as no exchange of commodities would be needed. page 4 But the instant any one, A, of the millions of human beings desires to have something—say the product of a day's labor of another—he begins to bargain for exchange by offering something that he can spare for the article that he wishes to have. It may happen that his neighbor, B, does not want the proffered article in exchange for what A desires. Notwithstanding, B supplies A with the commodity he asks for and receives a token, bearing the value of a day's labor on its face, as representing the cost of the article that B gave to A. By-and-bye B desires to have from C something that cost him a similar outlay of labor, and he passes over to C the token he had received from A in payment. It is a recognised doctrine that the transfer of a debt may be made ad infinitum. The only condition is that it was an honest debt to begin with; in the case supposed the exchange was a token for a day's labor for some commodity that took the same time to create.

Referring to the Token Itself—money,

it is of no consequence of what material it is made, provided that (1) the supply is easily procurable, (2) that it is durable, (3) that it can be easily carried, and (4) that it cannot be counterfeited; in itself money is only the tangible sign of some article of use or desire in terms of the labor put forth in its creation. What, then, of a golden sovereign? This trinket has cost at least the putting forth of from twice to ten times its value in labor to produce it! Little wonder is it that a gold mining country is always recognised as being a poor country. Manifestly to raise gold as a medium of exchange is a great waste of capital, i.e., of labor, the basis of all capital. True economy consists in expending as little labor as possible in producing any article desired for a given use. Hence the advantage of so-called labor-saving machines. The article under consideration for the moment is the medium of exchange—money. In the passing from hand to hand of this medial agency there is the danger that some person possessing a token, say for a day's labor, may take it into his head that it would be much easier to foist a money token into circulation for which he had not expended an honest day's labor, so he starts in the evil business of a counterfeiter or forger of money. The value of gold as coin, if any, is that in consequence of its costing a good deal more in labor to get from the earth than it will represent as money, it is not likely to be over-issued; whether there is enough of it to afford a regular supply is not often thought of.

If the revived doctrine of the alchemists should prove to be practicable, viz., that "indications point to the near discovery by scientists of methods by which to transform the page 5 two sole forms of atoms into any substance that may be desired," then perhaps the "superstition that gold may be made a standard of value" will become patent to the most credulous believer in the "intrinsic" worth of gold as a money token. But in the meantime may not gold be looked upon as representing the remorseless sacrifice of human life, the agony of ill-requited and desperate toil, of needless suffering, cruel bloodshed, and savage rapine? If we knew the history of a piece of gold and its transition down through the ages it might make us shudder as at the fire of hell. Of this more hereafter. We left A's acknowledgment of the indebtedness of a day's labor passing from hand to hand; at length it may be presented to him for the equivalent that B would not accept because he did not want it. A may have removed, or have nothing, or have died. It must be said of the issuer of money as is said of the kingly office,

"The King Never Dies,"

and that the State never becomes insolvent. The issue of representative value cannot be entrusted to any person or any body of people whose shoulders are less broad than the State itself. Money, as the representative of food—the support of labor as it passes from hand to hand, must be sure of conjoined food and labor being given in exchange for it whenever it is presented. This leads to the question that the issues must be adequate to the requirements of the State, i.e., of each person within its limits. Mr. Del Mar crystalizes, what I think no one will doubt the truth of, into these words:—"An expanding traffic needs an expanding money, one that by regulation can be made to keep even pace with increasing exchanges"; but must not be liable to "increases, without regulation, either from the adventitious production of mines, the obtaining of the money-metal by conquest, the unlimited emission of Government notes, the licence of private coiners, or the greed of private banks of issue." In another place Mr. Del Mar says:—"Pieces of money only need a mark of authority impressed upon them, and a Government virtuous enough to restrict their issue and strong enough to prevent the money mark being counterfeited." Some persons allege that such a Government cannot exist in Australasia, then shall we put ourselves in the hands of associated banks and their outside confederates—shareholders and other traders in money? As your late Mr. Bathgate remarked, "We have put our head into a noose, and let the banks turn the twitch-stick." As an illustration of the working of a medium of exchange let a single instance be given,

Going Back Thousands of Year.

It is allowed that the term nummus, once used by the Romans for money, came from the Greek nomos (law) in this case meaning the exact science of numbers; so that number and not "intrinsic" value is the synonym of the circulating medium of exchange—money. On the banks of the Nile are found small pebbles flat and thin like money, giving sizes from a sixpence to a crown-piece; these are believed to have been used by the kings of Egypt for money, hence the scientists have dubbed these nodules of limestone nummulites. Now, as there was an unlimited number of these ready-made pebbles, anyone might easily get a stock and oiler them in exchange for whatever he wanted, without having expended as much labor for each pebble as the commodity he proposed to purchase with it had cost the producer of that article for use. It is thus seen at once that the pebble-money must be restricted in its number, as the original form of nummus from nomos (law) implies—else like the over-issued paper money in Argentina, it would become greatly depreciated in its representative value—in other words it would take a great deal of the over-issued currency to purchase a very small quantity of goods. As the Pharaoh was the only person who was entitled to be supplied with food without having worked for it—he had the right to decree a fixed value upon each white-stone—he caused a certain number to be branded with the royal mark which none might imitate, this therefore became the pebble currency of the land of Egypt. The Pharaoh having gathered his tribute or labor-tax of food by the emission of his marked pebbles, maintained his court, his army, and his employes in public works as other Governments have done, each in its own particular way. The pebbles thus emitted became the currency of the country and enabled exchanges to be made among his subjects. If, as was likely to happen, the Pharaoh wanted further supplies he would make a new issue of marked pebbles, "watered stock," a process which would depreciate the currency; or he would make an enforced levy upon his subjects for some of the previously issued pebbles, and thus "corner" the money market, by which means the price of the food that he wanted to purchase would be rendered more favorable to the buyer. Judging from the financial tactics of later ages, if Pharaoh had surplus stores that he wanted to sell, he would emit his newly-branded pebbles freely, so that he might sell at a profit. This latter course might be State jobbery, but the kings of Egypt, like the Bank Associations, had not the page 7 terror of the ballot-box before their eyes; that may follow later on, so far as the banks are concerned. Passing along to the time of

David, King of Israel,

we read that by his victories he amassed so much gold and silver in Jerusalem, afterwards added to by his son's wisdom, that it is said "silver was not anything accounted, of in the days of Solomon"; plainly showing the absurdity of gold, or gold and silver—bi-metallisin, being reckoned as a "standard of value." From what has been said, I hope it has been made plain that an honest Pharaoh could, by regulating the issue of his ear-marked white stone currency, produce greater stability in finance than could be contrived by any uncertain influx of silver or gold. Food may be cheap for either one of two reasons—Because there is more of it than can be consumed (in which case no one ought to go short of it); or money may be so scarce that there is not enough in circulation to enable many would-be consumers to purchase as much as they require for their sustenance. In both instances the growers of wheat equally suffer, but it is in the latter ease that nobody benefits—the cause of the whole misfortune rests with those who have permitted a deficient money circulation to exist.

These are the two Teas

that the thimble-riggers of finance will continue to play in the game of picking the pockets of the public, and of keeping bread from the mouths of the poor, until the regulation of the currency passes out of the hands of private persons and becomes a matter of public policy.

I will now refer to the dynamics of money, as exemplified in modern times by "moving" food, as the Americans call it. In 1847-1848 there was a famine of potatoes in Ireland, but was no food produced there? Certainly there was. Why, then, did it not reach the famishing Irish poor? Because the power of the marked pebbles was exercised by a class who "toil not, neither do-they spin."

By Making a Levy Called Rent.

the oatmeal, and the pork, and the butter, raised in Ireland, went to feed absentees and their dependents, while the producers at home were left to starve. The co-operation of labor to-day is effected by means of money moving wheat from the elevators of Chicago, from the grain heaps of India, and from the ports of the Baltic and Black Seas, to wherever it is wanted to keep labor going. This result is accomplished by what is known as "capital"—the dynamics of money in the hands page 8 of a comparatively few persons. If universal labor had a sufficiently developed organization, the year's production of food might be delivered in rations, like the supplies of an army, so that each worker, having done the task allotted to him for the day, would have no other concern than to take his ration and spend the rest of his time as was most agreeable to his inclination. At present capital means just so much of the result that labor has gained from the soil as has been exacted from the toilers by middlemen, who, while distributing that product, not only kept food enough for themselves and their immediate helpers, but who retained enough of food-value in their own hands to create a new class of persons to produce food specially for the advantage of themselves. These persons are known as tenants, or borrowers, of the very money that the lenders had abstracted from the actual producers in the exchange of commodities that had been placed in their hands. They thus practically say to themselves and their Children by their accumulations,

"Take Your Ease, Eat, Drink, and be Merry,

for by the eternal fitness of things you have provided for yourselves an income of food for all generations to come." Nemesis is not, however, to be evaded. To escape ennui, the child of luxury, by etiquette and custom, has invented for himself toils peculiarly his own. Science itself cannot escape the never-ceasing contagion of custom. That cynical woman of genius, "Ouida," who, by her satire, preserved that relic of the past, the Cathedral of Venice, from demolition, twits the devotees of science with the keen eye that they keep upon the "main chance," the salary they must receive for their labors; "not for love alone," but "because there is money with it."

Capital may be said to be the system of dynamics which rules in this world of individualism, and is an agency by means of which the few are able to augment their possessions at the expense of the labor of the many, in contradistinction to the energy that should be begotten of the perfect organization of the labor of the whole community. It may not be supposed that the present state of social existence can at one bound leap into the improved condition shadowed forth in this paper. We have to do with a period of transition. What I have undertaken is to show that one mode by which progress is to be achieved is by the State taking entire control of the currency of the country. With the more advanced thinkers of the age I cannot overlook the circumstance that Mr. Del Mar points out, viz., that though "reform in the institution of money would remove many causes of popular discontent, it

Is Never Referred to by Land Reformers,

because the subject is one usually beyond the scope of popular agitators, and who, besides, may fear to risk the popularity of their own remedy by acknowledging the existence of another." He sums up his contention by stating what all ought to know, that "money," i.e., the whole system of the currency, "unheard, unfelt, almost unseen, has the power to so distribute the burdens, gratifications, and opportunities of life, that each individual shall enjoy that share of them to which his merits entitle him—or to dispense them with so partial a hand as to

Violate Every Principle of Justice,

and perpetuate a succession of social slaveries to the end of time." Ladies and gentlemen, which track is our course of social life travelling upon? Few persons will, I apprehend, take objection to the abstract lines I have so far laid down. The self-conscious dishonesty of those who possess ill-gotten booty always apologises for itself that it has by its own acts prevented greater wrong being done, and we teach ourselves to look upon the mass of moral and physical human degradation induced by the glare of what we call civilisation as a better position of affairs than that which preceded it. If this progression exists there maybe some hope. Probably, few doubt that the present condition of France is better than that which obtained under the ancien regime. Then let us not talk about finality. Again I refer to the history of the past, to show how ready human nature is to take the shadow for the reality. A block of wood has been prayed to as if it were the divinity it is supposed to represent. A king is treated as reverentially as if he were the "all sorts and conditions of men," whose interests he is pledged to conserve, till at length, not being unconscious like the idol, he forgets that the homage addressed to himself is only respect paid through him to the millions over whom he reigns; nor are democratic rulers free from the danger of a similar misconception.

In Like Manner, Money,

instead of being thought of and treated as the representative of labor, passing from hand to hand, is looked upon as something possessing intrinsic value of its own. Money itself is not a sacred thing at all, it is the labor for the life-sustaining food that it represents, that is the holy thing which, sanctified by inspiration and intelligence, is brought into practical usefulness by the "sweat of the brow," a type and a precedent to that labor which is unto life eternal, and the issue of which is encysted in the words

"Give Us This Day Our Daily Bread

."

This misapprehension of the nature of money has caused the greater part of the troubles of human existence, because the overwhelming fact that "a man's life consisteth not in the abundance of the things which he possesseth" has been lost sight of. As a consequence war, rapine, murder, aggression, dishonesty by strategy, and by overt action, have prevailed, till the doctrine that might makes right is accepted far and near, the frequency of the wrong having obscured its enormity not only in the eyes of those who inflict it, but also of those who suffer from it. It was found that to toil, though healthy, was tedious, and the results of toil, however honest, were too tardy to satisfy the ambitions of those who, forgetting the thing signified—the labor—fell down and worshipped the eidolon, the money, so that he was a true witness who summarised "covetousness" as "idolatry." Whether this fact were written in the Bible or no, it is as the frontlet on every eyebrow emblazoned by the wealth begotten of the ill-requited labor of others, till at length a Huxley could with truth aver that "it was better to have been born in heathen Fiji than in the slums of Christian London." The ethics of the misuse of money are graphically set forth in the story of the unjust steward. That worthy, unwilling to avail himself of the fair distribution of food by labor, alleged that he could not dig, that it was

Beneath the Ambition of a Thief

to beg—he therefore introduced the still practised "division of the spoils" between himself and those who became his willing tools. We have before us the food and the pebbles—the one the prime factor of life, the other the agent of distribution—each awaiting the performance of its office. Food is more heavy to move, pebbles less so, especially when their number is certified on a strip of papyrus—similar in effect to the silver certificates of to-day. Let it be supposed that when the Pharaoh, had, by means of the pebbles, taxed out of his fellaheen the corn that he wanted for himself and his retainers—such as public works, civil service, army and navy, etc.—these pebbles then became the currency of Egypt, by means of which symbols his subjects might distribute the remainder of the food among themselves more readily than by direct barter. It has pleased the moneychangers of the age to pass into slang, for the use of those unacquainted with the methods of commerce, that "Barter would be

A Relapse Into Barbarism."

When the masses of the people are better informed they will remember that all the business of the world is transacted by one kind of barter or another. There is page 11 not a politician here to-day, whether a protectionist or a freetrader, who does not hinge his arguments on the relative proportions of the exports and imports of this colony of New Zealand; and what is that but casting his language in the time-honored mould of barter? Then when does barter become inconvenient? First, in dealing with comparatively insignificant quantities of a commodity, on account of the difficulty of dividing and moving such small quantities over considerable distances; and, secondly, because the exchange of goods in kind does not admit of their being so easily sweated by their distributors as by the intervention of the token—money. Silver and silver certificates have been referred to.

The Silver-Men of America

know what was understood in King Solomon's time—that immense quantities of available silver cause its purchasing power to diminish. Hence they have set all their ingenuity to work, aided by all the political influence they can command by bribery and other means, to persuade the public into the belief that, in spite of the vast quantity of silver that is now being raised in excess of its economic uses, that it is possible to maintain for it the same purchasing power, which means, from their standpoint, the same selling price that it formerly possessed. To this end, the general taxpayer of the United States pays for all the labor of the persons engaged in silver-mining,—in fabricating the machinery engaged therein, down to the last person who earns his living from the industry of silver for coinage, instead of these hosts of workers being engaged in the production of some useful article of food or commerce. But these silver-men conjure up for justification the immensely overissued paper currency of Argentina. The over-value these men put upon their silver stands on no better basis than the inflated price put upon copper by the French syndicate or the over-issued face value of the Argentine paper. The worth of gold, silver, copper, paper, as money depends solely on its total volume, and on the rapidity with which it circulates.

This Great Dynamic Fact

has been purposely kept in the background till those who ought to know better have come to overlook its existence, in order that the public might, through not understanding the true doctrine of the currency, more easily become the victims of the money-changers. Hence the cry was put forth not long ago in New Zealand with respect to the financial project of the late Mr. James Macandrew, and doubtless repeated with parrot-like satisfaction by an uninstructed public, viz., "that Mr. Macandrew would put everything right with a pile of paper and a printing page 12 press." I need hardly say at this stage of my paper that I advocate what is called the quantity or numerary theory of the currency. Countries without a Government strong enough or sufficiently intelligent to curb the avarice of those who set up what is called a "standard of intrinsic value," whether of gold or silver or both combined—bimetallism—as the only means by which an over-issue of a non-intrinsic value currency can be prevented, usually lose sight of the fact that an inadequate issue of money may be as disastrous as an over-issue. This circumstance may not be so patent to the public, but writers on finance agree that "the influence which the contraction or expansion of the currency has upon prices and upon commerce has been rarely suspected by those among whom the events have taken place, who have usually been content to discover other causes than this for prosperity or adversity." When a financial crash comes

The Man With a Sovereign in his Hand

triumphantly laughs at his neighbor who possesses a note of the collapsed bank; but the man with the gold does not reflect how many pounds he has been done out of in his business by the fluctuations in the value of his property caused by the see-sawing of the financial wirepullers when they have alternately expanded and contracted the currency for their profit and his loss. It is asserted that Sparta, the first Roman Republic, Carthage, and every country while working under a numerary system of the currency has been prosperous. A purely numerary system is incompatible with a despotism, whether the tyrant be a king or an oligarchy. The Roman emperor, Octavius, it is said, wished to return to the numerary system of the first republic, but who was to control the emission of the currency? "To entrust the Senate with the tremendous powers would be to deliver up the government to them. The power would probably be abused. To regulate the currency himself would expose him to the attack of every dissatisfied class." No government in Australasia has yet arisen that could affix a sign on every money-token sent into circulation equivalent to the brand S,C of the Roman republic. The numerary brand of the famed iron currency of Lycurgus was, it is believed, the secret of its value. The famous William Pitt, like Augustus, quailed before the capitalists of his age, who were the masters of the Government debt. Mr. Pitt, with the Rom an emperor, saw that a numerary paper emission was a system of taxation equable in its incidence—the very thing the capitalists dislike. Thwarted in his object of fair play, he petulantly exclaimed that a national paper currency was to the bankers what a policeman was to a thief. I find that your Mr. Verrall, like Augustus Cæsar, has found page 13 how dangerous it is to propound an honest currency—the Roman was wise before attempting the deed, and thereby saved his political position; Mr. Vernall made the discovery at the expense of his place in the Legislature—but, still, magna est veritas et prevalebit. The present system, backed up by the gold and silver delusion,

Will Die Hard,

because it appeals right along the gamut of human covetousness, from the shrill scream of the cheap-jack to the guttural bass of the millionaire, offering to each and every a means of over-reaching his less informed neighbor. I have already indicated that I propose to relegate gold and silver to the position of commodities, to be bought and sold for what they are worth, as men, women, and horses still continue to be. I would like

The Civilization of to-day

—not by proxy of some of its members, but in a grand procession—every now and then to pass along the slums and into the dens of each abode of poverty in these islands; this done, that afterwards every outcast because of his poverty, with his wife and his children in their garments soiled by labor, or tattered for the want of its wages, there being nothing for them to do, should go in procession along your gayest thoroughfares and into your wealthiest churches that civilization might become better acquainted with the totality of its present outcome. This better acquaintance with the state of the case might lead to the aggregate of the people taking the management of their affairs out of the hands of the few into their own. Is it a hopeless task for these colonies, in the freshness of their youth and in the honesty of their purpose, to form a Government that shall emit such an amount of representative value as shall be

Adequate to the Need of the Country?

This emission by the Government once established and understood by the masses, the descensus Averni of over-issue would be checked by the knowledge gained from observing the financial effect of each succeeding issue on the trade, commerce, and agriculture of the country. In half a generation the public danger of being harmed by the jugglery of bankers' associations, with closed doors, assisted by their confederates outside, capitalists of every grade would have passed away, because the people would have become sufficiently enlightened to testify their wishes through the ballot-box. I may be told that I am very dogmatic on a subject that is very deep. Permit me to reply that among students of other schools of finance I might not page 14 be listened to unless I had the assurance that comes of conviction. A legislator the other day in your Assembly alleged that "an hour had been wasted and the hon, member fooled" during which this subject had been advocated by Mr. Verrall. Shades of Bathgate and Macandrew, fortunate that you are no longer in the presence of such a Solomon! Connected with the question of State issue of notes is the twin subject of land monopoly, to which I can in this connection make but little reference, save to note that the influence of

Land Monopoly in Victoria

was so potent that my paper on "Small Holdings of Land the Mainstay of Individuals and Nations" was only noticed in the just published "Transactions" by its title. I freely admit the feebleness of my attempt to deal with such a great question; the importance of the subject was the same, nevertheless. Often has my attention been directed to the progress of assisted settlement on small holdings in your beautiful islands, inaugurated I think by Sir Robert Stout and the Hon. John Ballance. The profound theorists who prosper under the present condition of finance may ask how is the State to discover what is an adequate emission of State paper! These querists will desire elaborate calculations and bewildering columns of figures. These are the receptacles of dust that they ever have at hand to blind the eyes of the public; but is not this the section for statistics? Not long ago a banker before a meeting in Melbourne, at the Bankers' Institute of Australasia, broadly asserted that banks' elaborate figures were

Not to be Trusted.

While long before that an English financier had stated that public opinion has been proved by results to be more reliable than the arguments of experts trained to think in particular grooves. Of this the operation of Sir Robert Peel's Act of 1844 may be cited as an instance. Living in London till 1848, I heard it popularly said that this "act was calculated to make rich men richer and the poor poorer." There are few that will now deny this view of the case. I submit a plan to illustrate how the proposed new system of a State Bank of Issue may be tested. Let an extensive plain which

It is Desired to Irrigate

be thought of. The question arises how many millions of gallons will it take to cover the plain a foot deep in the shallowest place? The mathematicians have measured its superficial area, and calculated the inequalities of its surface they have allowed for the supposed differences of the soil in respect to soakage; but after all the only exact test of page 15 quantity of water required will be to open the sluices from the reservoir and let the meter through which the water passes register the quantity till the desired level is attained; So let the Government cautiously ascertain what volume of currency will meet the expanding requirements of the country by carefully recording the issues and checking the results upon the business and productive energy of the country. It may be asked how it is that of the three systems of money that have obtained during the historical period—viz., the ponderata, the moneta, and the numerata, or the weighed, the minted, and the numbered—that at the present period the nations of the world have harked back to the system of Juno moneta, the minted, with

All its Vagaries of Haphazard.

My reply is chiefly because, as the late Mr. Walter Bagehot remarked, "those who best know many of the facts of banking will not tell them or hint at them." I presume he meant they were trade secrets. Science now disclaims these tricks of the dark ages. In the history of the world it is recorded that human power had too often exulted over those lying at its mercy. The victors left off eating their captives when they found it was to their advantage to employ or sell them as slaves. Under a partially enlightened national conscience, those in political or social power took advantage of the ignorance of those less informed than themselves, and do up to this hour propose that capital should have the balance of might on its side, and the food of the world within its grasp with which to enforce its power. Thus to-day, no matter at what expense in labor any property real or personal has been brought together—if merely one-half of its cost has been pledged for money—the mortgagee takes the whole of it and leaves the unfortunate borrower penniless. So glaring is this hardship that even the Law Times awhile ago revolted against its infliction, and said "the notion of sanctity of contract is outside the question, when the enforcement of the contract is practically impossible, or only attainable at vastly exceptional cost." The heaviest part of the indictment is that by tampering with the currency of the country these bankers bring about the very catastrophes that place the borrower at the mercy of the lender. It was given as a jeu d'esprit, in an American paper, that

Johnny Was Pondering

over his copy-book sentence "Honesty is the best policy," and submitted to his money-lending father whether it was so? "Yes, sonny, the senior affectionately replied—"if people had not been honest, how should I have got on as I have done?" The contention of the near future is between page 16 the reign of utter dishonesty in finance, disguised though it may be as an angel of mercy, and of common fair play. In my opinion the establishment of a State Bank of Issue somewhat upon the lines of the Bill carried in the Upper House of New Zealand by the late Mr. Macandrew, is the thing to be done. Then, moneta, the minted money of the usurer, will give place to the counted volume of the numerata under the regulated control as to its emission by the Government of the people who have to get their living under its potent influence. But this being so, how is it that the vast edifice of progress has been reared during little more than a century? Certainly by means of co-operation, of which up to now money, i.e., capital, has been the only efficient agent. The despotism of a single mind could build a pyramid or found an empire. This power having passed away, on its ruins has arisen capitalism, that is, the concentration of the results of other men's labor in the hands of a few. This oligarchy by the use of the lever of wages has exacted from the laborer a large proportion of the reward of his work. Then, if capital ceases to be the bond for co-operation of labor, some power must take its place. Economists look to the combined action of a State Bank of Issue and the organization of labor to replace the iron hand of the taskmasters' wage-power. The progress will be slow, but the reason why a Government which is said to be of the people, for the people, and by the people, should not begin to be welded into a great cooperative power, by the aid of a State Bank of Issue, it is difficult to pronounce. Because the management of State finance falls into the power of money-forgers like the late President Celman of Argentina, the robbery perpetrated, or the financial ruin brought about, though not peculiar to paper money, is laid at its door. The supposed reserve of

Gold in the Bank of Amsterdam

when looked for was found to have been spirited away, and when the disturbing ideas attaching to the importance of gold and silver coinage are banished for good and all, we may expect to have a currency founded on a true basis, and one that, as knowledge extends, will be "understanded of the people." We might as well repudiate the use of either fire or water because of the destruction wrought by a conflagration, or the devastation caused by an extensive inundation, as condemn the use of paper money because its excessive issue has brought about financial disaster. Then what of the constant practice of these colonies in borrowing foreign capital? Mr. Bagehot averred that what will be the effect on incipient civilizations by the facility with which these loans are asked for and granted "no untutored mind can say." page 17 There are not wanting men of great political insight in these colonies who say that the refusal of loans from outside capitalists would be one of the best things that could happen to the public; but then, what would become of the money-brokers at home and abroad? Why the Australian colonies, unlike most other countries, should have no

Internal Debt of Their own

whose bonds should be a convenient mode of investment and opportunity for mild speculation, it is difficult to divine. The Chief Justice of South Australia the other day, in a State correspondence, recognized the want of a "local market for Government stock." If the insatiable bent for borrowing outside capital was checked, We might set about discovering how we might help ourselves, and probably should find that a measure similar to the Bill of Mr. Macandrew, passed in the Upper House of New Zealand, for an Act to be entitled "The Public Advances on Land Act of 1886," would meet the case, provided that the bonds were open to be purchased by the savings of the people. It is a frequent remark that the

French are More Patriotic

than the English—and for a very good reason. A Frenchman can purchase Government bonds called rentes for as small a sum as £4 each, upon which he receives interest—he therefore feels that he is somebody, and that he has a stake in the progress of his country. In 1886 a £20,000,0000 French loan was called for—it was subscribed twenty-one times over; there were, in all, 247,000 subscribers, the greater number of whom were for 100 francs—£4—all of whom received their full allotment. It is small wonder that the French are patriotic when over 5,000,000 are small landholders, and many millions hold the bonds of their country. Fancy, what Australian workers might become if thus recognised by an oligarchy no longer supercilious. The notes issued by the Government would form the currency of the country, and, as agents in production, like the marked pebbles of the Pharaohs, they would distribute the rewards of labor to him who had earned them. Mr. Macandrew's Bill provided for the conversion, on demand, of interest-bearing bonds into notes not receiving interest and vice versa. A well-regulated State Bank of Issue should so far minimise the fluctuation of value as to assure a borrower of money that the interest agreed upon, as it became due, and the principal sum, when to be repaid, should be met by the sale of about the same quantity of produce of live or dead stock that the money borrowed would have purchased at the time of the loan. Everybody will know that under the existing system of a forced expansion of the currency at one time and the

Violent Contraction

of it at another, that the borrower of £1,000 at 5 per cent, when money is abundant may, when money is scarce, have to sell 50 per cent, in quantity more produce than the money would have purchased when he borrowed it, when wanted to pay his interest or repay the loan. Of course I shall be told that this "arises from financial depression";

A "Visitation of Providence," Etc.,

This is the very, thing I am trying to get at—the providence that sits in bank parlors—and I want to see God's good Providence, as of old, turn the money-changers out of His temple of justice and fair play, which shall no longer remain "a den of thieves." How just my contention is, let anyone refer to a paper read by Mr. Matthew Macfie, on the 14th November, 1888, before the Bankers' Institute in Melbourne, when he stated that the Bank of England adopted the policy of keeping its supply of the currency inadequate that the Bank might have occasion to demand a famine price for accommodation to its customers; that the Bank had been known to force its official minimum to 10 per cent., while French traders, at the very time, were only paying 3½ per cent. "It is time," Mr. Macfie said, '"to put an end to abuses whose maintenance for so long a period is alone due to

Credulity and Ignorance."

If I have succeeded in shaking this false confidence of "credulity" and dispelling this ignorance in any degree, I submit that I have, in however humble a manner, aided in forwarding the objects of this Association.

To Summarize Briefly, My Contention Is—

(1.) That a condition essential to the currency of any country is that it must be of such a character, that by regulation, its total numerary volume may be adequate to the business requirements of the community.

(2.) That a so-called metallic basis for a currency is a delusion and a snare, and only plays into the hands of those who seek to avail themselves unduly of the results of other people's labor.

(3.) That for the social and political welfare of any country it is indispensable that the emission of its circulating medium, money, must be in the hands of one party only, and that party must be the State.

(4.) That as the power of capital, at present, is the only efficient bond of co-operation there must be substituted for it the united force of organised labor, and of a State Bank of Issue, before any permanent change for the better is possible.

(5.) That while this change is being effected, the increase of knowledge in social science afforded by the correlated facts of statistics will hasten on, I hope peacefully, the revolution that I have tried to briefly set forth in this paper.

It will be doubtless be conceded that the true province of science is to utilize the lessons afforded by the study of the past, whether in time nearer or more remote, till at length "all things shall work together for good" because the finite and fallible science of man shall more nearly run co-ordinate with the infinite and not fallible purpose of the Supreme Mind. This result cannot be while civilization and science leave out of their calculations "the least of these" who bear the human form. If I am correctly informed, even the Maories surpass ourselves in caring for every individual in their community. As I think, it is time that money, the means of the distribution of wealth, should be made to more efficiently perform the office that pertains to it, viz., that "he that gathered much had nothing over, while he that gathered little had no lack." Political and social science may be considered as the object and end of all discovery. "Gather up the fragments that nothing be lost" surely applies not less to humanity and to each of its units than to objects whose main title to our consideration is that they minister to man's sustentation and well-being. As noticed in the address of Sir James Hector, the distinguished President of the Association last evening, science should teach how, in prospect of a vastly increasing population upon these islands, the elements for their support should not be deported without practical science providing for a renewed supply of plant-food to the soil. It is to be hoped that no considerable portion of the surface of beautiful and picturesque New Zealand shall be rendered useless for all time by mining operations, like vast tracks in Nubia, California, and elsewhere—when the disinherited classes shall become the special wards of science—and when the civilization of the future may boast as did the Incas of Peru in a past age, that not a single person of all their subjects was not provided for.