THE CURRENCY AND THE FARMER.

Press, Volume LXVIII, Issue 20489, 7 March 1932, Page 11

THE CURRENCY AND THE FARMER.

TO TH£ EDITOR 07 THE PRESS. Sir", —In Saturday's issue you gave prominenca to the remarks of .Mr S. B. Macdonald, of Dunedin, who advocated that the currency of the Dominion , should be increased by six millions and the money spent on the unemployed. I will not remark on the details of this, although it had some features that could be criticised. el would point out that money spent on unemployment up to the present has been spent largely on unremunerative objects under the direction of amateurs. Probably a fair estimate is that only 40 per cent, of the money spent on unemployment is effective, and a large proportion even of that is on work the return from which will only be seen in years to come. Sales taxes are at present being imposed in many countries as a source of Government income, and a sales bonus would be an equally valid system of helping production. Increasing the currency to aid production would therefore be a more valid mode, of assistance to the community tlian Mr Macdonald's plan. A 15 per cent, bonus on production paid >to farmers next year on all they produced in wool, meat, grain, or seeds would P ln ,e hands of exports cash which would be spent to good advan-tage-;—circulated through all the community, and give a far greater proportion of immediate return than it spent on public works, etc.. etc., for a return on which we should have to wait for years. At the present timo increased credit for farmers must be made available, as their credit ..and that of the companies who have been advancing money to _ them in years past is much impaired. Tj nless some additional security for a return is available for next year to farmers and stock firms, a considerable greater proportion of land will go out of production or its productivity be much impaired. The farmers under severe losses have manfully carried on during the last two years; they need encouragement to carrv on Up to four millions could be added to the circulation by the issue

of Bradburys to farmers at so much per head for every breeding ewe, every cow in profit, every acre of land m wheat. This could be verified by the stock firm, the banks advancing the money, a local credit committee, and the stock inspector for the district. The - money would be made available to the most necessitous first, to others as it became necessary, so that the issue would gradually percolate through all sections of the community as land came into production and lead to renewed employment of men in their natural avocations. As the farmer is the bedrock producer of all our exports on which the theory of the necessity of an increased exchange rate is based, there is no excuse needed for an increase in currency to apply to Uim. Provision could be made (or this issue of Bradburys to be redeemed by a sales tax on products that had been given a sales bonus when prices rise above the average in future years. This might be a mode of equalising the currency over a series of years, inflating it when prices were under the average, deflating it when prices were over the average. It 'thought advisable, the bonus on production could be extended to the production of mines and factories. The plan may be termed inflation, but our circulation for the last ten years has been inflated from five to 10 millions a year by outside loans, which have now ceased. Will other minds add to or subtract from this proposal? —Yours, etc., EX-FARMER. March sth, 1932.