FINANCE

Bay of Plenty Beacon, Volume 7, Issue 7, 23 September 1942, Page 4

FINANCE

Sir, —We are no doubt 'living in art age where credits are playing a pro~ minent part in our leconomic life, but its power of. application does not render the best services. In my last letter I 1 dealt with what I had read about tlis different credits, in this letter I get a lead from what I hear over the radio night after night, National Savings Bonds, Patriotic Funds, Red, Gross Society Fund., Men of ability stand: in front of the microphone appealing for help to these different funds. Why all these appeals. They are only riding the willing horse, the highest honours' to those willing workers. All energy could be saved, itlie Government has the power (if not they can soon get it) ;to commandeer capital, they only need legislative power to do so, and tihat is the necessary asset to create a credit against, capital, just as credit has been established against pro"duction. How this credit wor&s, can be gathered from the following instance: A company with a large share capital with say only a sma'll amount of share capital called up. They need capital urgently and the process of getting uncalled capital would be too slow. They are armed with authority to get this uncalled capital. That being so they establish a credit with their bankers against the results of called up capital and uncalled capital just as uncalled capital can establish credit. Commandeered capital can establish a credit, sufficient to provide funds for these Societies and War Finance. What is the use of capital if an enemy took possession of New Zealand to-morrow? We anticipate him and make use of our capital tk> defend New Zealand through the medus of our authority .to commandeer capital before he arrives. John Brown says -what next , the Government is going to take our money. The Government won't itouch his Gr any one else's money.. They establish a credit against it to provide a means of protecting it. John Brown gives a Bill of Sale (in other words our authority to commandeer) over his stock ami chattels to establish a credit. JThe words Bill of Sale give the authority for. the credit, the stock or chattels don't shift just because some one saw fit to establish credit against their value-. The great United States nation commandeered the capital of the United Nations through the medium of the Lease and Lend Act, and created credits to finance their war supplies, then reduce Lease and Lend to commandeer to defend New Zealand. Yours etc., P. MORA,