AUCKLAND UNION'S REPLY

Bay of Plenty Beacon, Volume 05, Issue 69, 24 June 1942, Page 6

AUCKLAND UNION'S REPLY

INFLATION FALLACY EXPOSED UXFAI li DISCRIMINATION The Executive decided that the following reply should be sent to the Dominion President as embodying' the Executive's views on the points raised.

"1. It is suggested by the Minis ter that the payment of the 1,1 pei cent increase Avill produce a state o 'inflation,' but he does not define th< term. If he means, as seems to b( implied, that a state of inflatior arises from putting such a volume of 'money' into circulation as will cause a rise in the- general pricc level, who have to point out thai that has been the Government's policy ever since they went into power. The genuine savings of the people have supplied a very small proportion of the large sums of money borroAvcd by the G over nine t from those who have the poAver to create money. The expenditure of these large sums has demonstrably caused a rise in the general price level and it is only iioav, after some six years, that the Government fears that a belated and insufficient additional payment to a section of the farming communily Avill be disad\ r anfagepus jto the nation. Practically every other section of the community has received and is still recciA r ing substantial additional payments Avithout causing the Government to fear inflation. "2. The additional costs AA r hicli haA T e been forced upon the farming community are considerably more than the suggested additonal pay-* ment and have caused economies—which are mostly uneconomical in the long run—and a substantial reduction in the farmers' net income'. "3. Good farming practice requires that this, additional payment should be made as soon as possible. Entirely Inequitable "4. The Minister's proposal to supply the Ncav Zealand Avoollcn mills Avith avoql at a price loAver than that paid by the British Government means that sheep farmers Avould subsidise the mills to the ex~

tent of some £208,000 per annum, rilis appears to the Provincial Executive as entirely inequitable. What would be said to a proposal that the miners should subsidise the freezing works, or that the waterside workers should subsidise the shipping; companies? This question involves an important principle with many dangerous possibilities, and means

that the compulsory acquisition of wool at a price admitted by the Inn perial Government to be below that necessan r to maintain the stability of this great industry. "5. The threatmsed by the Minister is duly noted. The Provincial Executive is not moved thereby save to regret that tlie Government appears to have adopted the policy of using threats to the farming community that they dare not—or at least do not —use to other sections. "For the foregoing reasons the Provincial Executive is strongly of the opinion that the Dominion President should confine himself to pointing out the necessities of the case and inform the Minister that he and the other members of the Government must accept the full responsibility for the result of withholding payment in full of the sheep owners' own monev."