A fool and his money

Rentenpound for Britain ?

Bernard Hollowood

Mr Kan Wigglesworth, Labour MP for Teesside Thornaby, wants the Chancellor of the Exchequer to make the hoarding of South African coins, krugerrands, illegal. He maintains that the purchase of krugerrands is unproductive and diverts investment money away from sectors of the economy where it is desperately needed.

British buyers of krugerrands and other gold coins (legal tender or otherwise) are hoping of course that the price of gold will rocket when US citizens are allowed to buy bullion on January 1, 1975, but they may very well be disappointed if the views of Hiram H. Winterberg of New York are anything like representative.

"Personally," says. Mr Winterberg, "I wouldn't give this gold house room. A lot of the stuff in Fort Knox came from Germany. after the war and some of it at least must have come from the gas chambers of Dachau, Belsen and Buchenwald. The gold teeth and wedding rings of Nazi victims. No, thank you — I shouldn't care to own gold of unknown origin. "Moreover, I'm not keen on supporting South Africa where some of the gold comes from. It is mined by sweated labour, by blacks who live in labour camps and see their wives and children once in a blue moon."

Mr Healey is in an awkward position. He has recently decided to cash in on the gold bug by ordering the Bank of England to issue a minting of Elizabethan sovereigns selling at a premium of 60 per cent. No doubt he justifies this as a profitable export business, but some of the sovereigns will inevitably find their way into British hands.

In theory the sale to the public of expensive but easily-made rubbish such as medallions, trinkets and dud coins is deflationary and therefore praiseworthy. Money spent on such baubles might otherwise have been used to buy consumer-durables and durable goods, with damaging effects on prices. Ideally we should get rid of surplus purchasing power by patriotic displays of pyrotechnics. Once a month, say, every town and village would hold a public bonfire at which citizens would be invited to consign as much of their paper money as possible to the flames. And there should be published league tables recording the degree of selflessness achieved by each community and the success of its efforts in relation to competitors.

The rich would be expected to set a good example by burning banknotes of large denomination and there would be special applause for workers who sacrificed fivers and pensioners saying goodbye to pre

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nflagrations are consi dered too idealistic — and I can see that they might soon lose their appeal — the government's best deflationary move would be the issue of car stickers priced variously at £5, £50, £500 and £5,000 in distinctive colours with some such message as "I'm doing my bit. How about you?" or "Help British Recovery. Lick Inflation." Minting sovereigns from 9-carat gold and selling them at a profit of 600 per cent would work provided the sale of krugerrands and other overseas coins were prohibited.

Inflation is of course the chief reason for high interest rates and the resultant flight of money away from industrial investment and the stock market, so our future pros perity depends on the speed with which we can bring inflation under control. It is possible to find grounds for hope in the vogue for krugerrands. After all, if people are prepared to sacrifice interest at 13 per cent (obtainable from any local authority) in order to possess a bit of overpriced gold that could quite easily slump in value, there is good reason to believe that something like the German Rentenmark — issued in the 'twenties in a time of hyperinflation — would succeed here.

The Rentenrnark was a new unit of currency supposedly backed by the land of the Reich. It was approved and accepted with confidence because it entitled the holder to an unspecified morsel of the soil of Germany, something tangible and real. Well, we have the land to back a British Rentenpound, but I think the British would be more impressed by what I will call a licence-pound.'

The British are lovers of TV, pets and sport and could hardly exist without them. We take them for granted and expect them to be available for next to nothing. But they could all be made much more expensive without producing any shortfall in demand, and a pound backed by licence fees would com mand immediate respect. For starters I would suggest a TV licence of £150 a year, a cat licence of £70, a dog licence of £100 and a licence to attend a sporting engagement of about E5 a time. Stiff? Certainly, but there would be special terms for pensioners and spinsters.

The introduction of these new licences would produce a howl of protest, but a succession of tough ministerial broadcasts and an enlightened advertising campaign would soon convince the British that the measures were essential in the battle against inflation. Ask yourself whether you would get rid of pussy rather than fork out 00 for a licence? Ask yourself, and answer honestly, how much you would pay at a pinch for your nightly fix of TV, for Rover or Queenie, or for the privilege of watching United every other week.

In a crisis we have to tap the fundamentals of the national char acter and act accordingly. A pound backed by the gilt-edged surety of the licence fee would soon steady down, and a year or two of really swingeing licences would kill inflation stone dead.

Give the people something really worth working and saving for and the country would soon be buzzing with activity, ingenuity, acumen and overtime. There is something effete and decadent about a people eager to hold krugerrands. There is something British, at least, about a

people slogging its guts out to watch Coronation Street or Cali My Bluff.

Bernard Holiowood, formerly editor of Punch, contributes this feature weekly to The Spectator.