LABOUR AND MONETARY POLICY

Press, Volume LXXI, Issue 21419, 11 March 1935, Page 7

LABOUR AND MONETARY POLICY

T n mr. Ei',H of run mess. S, r ,—Mr At more asks if the New Zealand t;..>vi.rum'.i>i made the F.erve Bank a present of £25,000,000. jv th;-t " r - v Cl " m ' e question 11 - I ' l ' ,IT "' rc has -C IOOO to j,;/crcdit in London and pays it into 'bunk H" re 1,1 New Zealand, nc j o; , i|n !,-<'ir:th of this he is v .-,u, i!"- Nev. Zealand and draws cheques in 3." Zealand »*'"•« i( - has " ol a pcr.rnt to ih< bank. but has „,:.rl»i.-erv 1- mel.o London for T - in Now Zealand. " •'»' ' x:,irl,v . f T '! ln '; :,ch . on ' ,- re c;,,\ fniin' '' l wJin Us London. credit.' and I- *•» day business tratL'-ficti'-'o. for M." AS':-.-,- ' na ' thG lca guc in "-peak.nx lor the bank" is wrong WV are not concerned about liic bank. but about the correction "i a public statement which might mislead some of your readers; namelv that tin.- hank only had £SOOOOO subscribed capital and created •rem'that A; 22.0011.000. That statement overlooked a re-erve of £ 1.000,000. and the credit in 1 .ondon which it held C n behalf of the Government. VVe mad:- "o attempt to prove that the slump was not mused by n shortage of money The ordinal correspondent ai-|. "'■•• d'o ;■ i"air thru it was due to a si' i of "d'scA ' by which vp a?surs"'d in- ':t< ai-.i currency. S'> ve ft.ited -i i.'.ct; 0.-iniely, that there ■u-as amc> |r ••urr>-:.<-y 111 New Zealand to carry "" 'b i ''' '"<• ''"ii"tTV espcr::>)\:- •' tjiided as ' pv:,. tirall.. rmioncy " J lore tain Mr Alnv r e i- I:..; fan . He ~ii> s that the league "••dm.ts that 0(1 per cent. Ol" oil-- ;;'i"lio.\ 1., credit (bill treated by ;airi therefore belonging to the community i. and as this is practically costless creation, etc." Wc said nothing even approaching tins. Our statement was one of fact: namely, •that cheques are used for about 90 per cent, of the community transactions."' To turn this into '"00 per cent. *f our money is credit, etc.." is closely •.skin to misrepresentation. If Mr Atmure pays into his account the proceeds of a sale or part of his income, and. ra'.ner than cart round pound notes. : cities an account, by cheque, docs bold that the use of his own money < ih- same as working on credit wit;'h belongs to the ewnmuni'y etc.? IT be docs. v. e clifer from him. We »n v.- r even suggested such a theory, though he ;iceu--.es us (A doins so Judging by 'be oiher letters in the yair.e issue a.> Mr Atmores i March 5i ■on have h.ntk'i yourself into a spate cf ccrresponuonee on Douglas Credit, *nd from tbo.-r woo appear to think ne banks should iclease their shareholders.' re-jurces io general use. regardless of safety or security. There ;s alw a hint, if not an actual statemen*., that al! credit granted by banks is costless that if it is not paid, no one wii« io-e anything: also that all created credit belongs to the cemmunity. Tnis will open tip an mitrmirrib:-: "round the mulberry bush" controversy; so we for the mor.ient do not propose to rise to Mr Atmores tuck invitation to join him en a Dcuglcs discussion. We tise the word "mv.ta'.ien" because his letter 'bvitusiy cpc.is the door to that j;ub- .!?«. and no dcubi does so deliberately. —YCuTS. etc.. .YEW welfare I.EACIii:. U'cili!r.-00. M.-'-ch IMS.