OFFSETTING INFLATION

Bay of Plenty Beacon, Volume 8, Issue 10, 22 September 1944, Page 5

OFFSETTING INFLATION

THE VICTORY LOAN .RESERVE BANK OFFICIAL'S VISIT Last Tuesday a visit was paid to iWhakatane by Mr J. W. Deputy Chief Cashier of the Re« serve Banlt, in connection with thp IVictory Loan. In an interview Mr Burland emphasised the advantages t.o be gained by ensuring the success of the loan. He said that, as a result of wai conditions, a great deal of surplus money was in circulation and thai if any attempt were made to spend lit there was; a danger that prices Jmight be forced up to the detriment of the public generally. It was probably not realised that in 1942-43 the aggregate private income of New Zfealand amounted to 110 less than 257 million pounds of which about 170 millions was shar' ed by salary and wages; earners, leaving the rest as the. profits, ol primary and secondary industries. One result of those prosperous conditions; was that 137 millions of spendable money was available to the public at present. Of this huge sum only 40 millions were required for the Victory Loan. Speaking of the source from which it could be obtained he said that J three, methods were open to the Gov•eminent. First by extra taxation which would be very hard on many people ( secondly by voluntary loan Vvhicli was the best and most sen' sible way, and thirdly by inflation, which meant, if the Government could not obtain. the, necessary funds by taxes or public loans. f at had to borrow from the banking system, and this was the worst and .most injurious way of as it put more money into circulation at a time when there was already too much. Regarding the payment of money ..borrowed, he said that under the Public Debt; Redemption Act of 1926 ;.a sum had to be set aside each year for payment of maturing loans and that money lent was, therefore perfectly safe. Real value could not he obtained these days and he urged "that people should conserve, for a few years in the expectation of being able to buy more cheaply later •on. Extravagant spending was. to Jbe deplored as it only did Under inflationary conditions; penpeople of private means and dependants were always hit first and the' salary and W 7 age earner suffered next through the rising tendency •of prices and it was in the interests of the individual to realise his responsibility and take steps to protect the value of his his savings and his investments. The same principle applied to the farm•er or business man who being practical men a ■would understand that ■what was good for the whole comaminity was good for them also. Speaking of the future Mr Burland said that New Zealand was the property of its people and could be kept sound and prosperous by the people -and by no one else. If we acted to--day in a sensible and realistic man-* ner we would find that in due course "we had benefited ourselves.