Dear Sir.

Bay of Plenty Beacon, Volume 10, Issue 52, 20 November 1946, Page 4

Dear Sir.

Letters to the Editor must be clearly written on one side of the paper only and where a nom-de-plume is used the name of the writer must be included for reference purposes. The Editor reserves the right to abridge, amend or withhold any letter or letters.

DIMINISHING PAY ENVELOPE

Sir, —The National Federation of Labour is at present giving consideration to the necessity of a general increase in wages to meet rising living' costs. It is less than nine months ago that the Arbitration Court sanctioned an increase of 11s 8d per week in all awards for this very same purpose. Prior to this we had two 5 per cent, cost of living bonuses, one in 1940 and the other in 1942. It is evident that, as the present inflationary trend progresses, further wages increases will be demanded at more and more frequent intervals and it is a clear indication of the futility of the operations of the Price Investigation Tribunal and the Economic Stabilisation Committee.

Unfortunately for' the wage-earn-er, wages always lag behind rising costs. Employers, loathe tp increase wages because they know that further production costs will result, hold off the demands of their employees until general dissatisfaction forces the issue. The wage-earner soon finds that any increase in his pay envelope is merely reflected in the increased prices of consumer goods while taxes on his pay envelope add to his dilemma. Any working man who to think will realise that wage increases are not a cure for this exasperating problem but merely a sedative that allows the disease to spread under a cover of seeming prosperity. Each increase in wages causes a considerable increase in the amount of money in circulation and, without a corresponding increase in production, prices must rise still further. Under our present financial setup, not only the privately owned trading banks but also the politically controlled Bank of New Zealand are permitted to push million after million into circulation without any due regard to the exigency of equating money with goods so as to ensure a stable purchasing power in the community. There is a practicable and simple solution to this problem and one that the Federation of Labour would be wise to consider: “That Statutory direction be given the Reserve Bank, or Currency Authority to use all its powers of control over the money system to maintain a stable price level for commodities thus ensuring that the money in the pay envelope is kept stable in purchasing power.” If this suggestion is adopted, any future wage or salary increase will not be for the purpose of meeting increased cost of living but to raise the standard of living of the worker and at the same time protect his earnings and savings.

If the electors want to ensure the sanctity of the pay envelope, they should insist that the candidate they vote for in the approaching General Election is pledged to support this vital reform.

Yours etc., C. F. COUTTS, General Manager, Dominion Breweries Ltd.

UNSOUND FINANCE

Sir, —That the New Zealand pound note no longer buys what it formerly bought and that its value is still declining are facts notoriously patent to all of us. May I, as president of the League for Ecenomic Democracy, be permitted most strongly to urge upon all electors that before giving their support to any candidate, irrespective of party, they make sure that he is alert to the widespread evils resulting from unstable money, and that he is explicitly pledged to remedy the legislative defects from which they spring.

Adequate protection can be secured only by inserting into our statute laws explicit instructions either to the Reserve Bank, or to a specially constituted monetary authority, to maintain the New Zealand pound note stable in its internal purchasing power over commodities.

All other expedients, such as harassing price-controls, commodit3 rcontrols, guaranteed prices, subsidies to producers and relief pay to unemployed, are merely palliatives; ambulances, so to speak, at the bottom of the precipice when the real and vital need is a fence at the top. So long as currency and credit continue under the present system of control or rather lack of control without regard to keeping money and goods in step by maintaining a stable internal price level, so long

will New Zealand be afflicted by successions of booms and slumps, those iix authority playing with the situation with makeshifts necessarily ineffective because they fail to reach the seat of the trouble. Now is the time to act. Now is the time to secure economic protection for our country, for ourselves and for our successors, by electing a Parliament every member of which has given a decisively affirmative answer to the following question:— “Will you demand and vote for a legislative instruction to the Reserve Bank, or to a specially constituted monetary authority, to employ all its powers to maintain the New Zealand pound stable in its internal purchasing power? Yours etc., H. T. GIBSON, President.