VALUE OF NOTES

57

although it will buy less than before. The answer to
this is that it implies that value can and must properly
 be measured in labour cost of production instead
of in commodities and services ; the idea is that it
has become more difficult to get gold and other
commodities, and therefore they are more valuable,
and the higher price in the unit of account merely
gives expression te this, and therefore has not been
produced by the issue. But we do not measure, and
we do not wan* to measure, value in labour-cost of
production ; if we aid so measure it, everything in
savage or primitive times when the productiveness of
industry is very low would be of enormous value.
So this answer would be of no use if it were true, and
that it is seldom, .f ever, true is suggested by the
fact that it has almost always been put forward as
one of the defences of over-issue, and it seems unlikely
that inconvertibility and a decline in the productiveness
 of industry so often go together.
4. The more acute Government apologists content
themselves with alleging that the issue is only one
of two or more causes tending to raise prices. There
are always many causes tending to raise prices, so
that this is sure to be tr:- and .t does not in the
least destroy the force of tiie proposition that the
issue tends to raise prices.
5. We now come to what is at once the most
insidious and the most dangerous of all the arguments
in favour of increasing issues. This is that the
issuers have no control over the issue and that it is
‘“ automatic,” as it only takes place when the notes
are asked for, so that they are ‘‘ issued in response
to a genuine di mand and not forced on people.” It
might as w "= rlaimed that the issue of pocketmoney
 ‘ - not under the control of its
parents b.caus. avtomatic, only taking place
when 17° mc a’ .& for. Qld-age pensions,