FINANCE

Bay of Plenty Beacon, Volume 6, Issue 6, 18 September 1942, Page 4

FINANCE

Sir,—l have read with interest several letters in your paper published over the names of different writers attempting to deal with finance, all sorts of credit have been suggested to my mind. Credit of any kind is no good unless the money is forthcoming to meet it.. I was in Taranaki during the slump years. Many writers there and elsewhere endeavoured to give reasons for the slump. At this same time when things were at their worst the Auckland Herald, dealing with Trade Balances, quoted the Trade Balance between New Zealand, and Great Britain as £24,000,000 or in other words. New Zealand's exports had exceeded her imports by that, large sum. Now instead of this large sum of money coming to the Dominion, and being distributed to those that earned it, it remained in London as a credit against interest on loans. The very persons who were fighting the slump incurred liabilities in helping to produce this trade balance or credit but could not get the means to liquidate them. I claim that if that twenty-four million had come to New Zealand and been distributed to those that earned it they could have paid all their liabilities and its circulation before finding a res Ling place in the banks would, have paid ail the debts causing the slump and its poverty. To illustrate this John Brown at the North Cape issues a cheque for £5 in favour of his grocer the grocer forwards the cheque on to the merchant from whom he gets his goods, the merchant tenders it to an employee, the employer pays it to his butcher, the butcher to some one else, the cheque could travel from the North Cape to the B'.uff and pay £5000 worth of debts before finding its resting place in the bank. By the same principle £24,000,000 could, have, paid New Zealand's slump debts if it had been allowed to circulate That wasn't Douglas Credit but a sitting credit. New Zealand may have boasted of Avealth because that £24,000,000 credit was in London but more than half her people could not pay their debts that's how much good that credit was. A farmer with a credit balance in the bank of say £5000 no doubt considers himself well off.. But is he? The drains ooi his farm are all full up, the fences are all down, buildings falling to pieces. Had he circulated, portion of the £5000 in upkeep its circulation would have done the same as John Brown"s cheque. This is another credit or sitting credit, j Credit to my mind has- many friends born in the same house Time payment, deferred payment. Some will no doubt say what about the great Lease and Lend. The last word lend makes the instrument honourable in other word.s we- will talke it back when you are finished with it. Yours etc.* . P. MORA.