"UNREPENTANT APOSTLE ON OUTWORN CREED"

Chronicle (Levin), 4 May 1946, Page 8

"UNREPENTANT APOSTLE ON OUTWORN CREED"

MINISTER'S EEPLY TO ,MR. LEFEAUX ~\ WELLINGTON, May 3. " A parting shot at tlie Government's eontrol oi: the Beserve Bank was made by Mr. Leslie Lefeaux before embarking" on the Akaroa for Britain,'. said the Aeting Miiiister of Finance, Hon. D. G. Sullivan, in a Statement todav. . "Mr. Lefeaux 's whole attitude is based on his inability to imderstand that in 1935 and at subseqnent eleetions, the people of New Zealand, exereising their d.emocratic constitutional rights, voted for the bankihg and finaneial policy of the Labour Government and against the alleged 'sound' finance policy represented by Mr. Lefeaux, that was hindering New Zealand's return to prosperity. His grouch, therefore, is a grouch against the decision of ' the electorates. "In 1935 Government expenditure was needed to affect excessive unjustifiable deflation which the . Nationa.list Government and its fmhncial advisers had imposed on the country and which Mr. Lefeaux, on attaining office as Governor of the Beserve Bank, did nothing to correct. The Labour Government in 1935, by increasing wages, salaries and pensions, promoting public works and industry, and by guaranteed prices, increased expenditure, expanded our eeonomv and corrected the disastrous deflationary policy of its predecessors. Up to September, 1939, the total of the Beserve Bank advances and investments in New Zealand was £23,500,000, mainly for liousing. Mr. Lefeaux says this was unsound, but what was the result? The answer is this — houses. Mr. Lefeaux asserts that in 1939 'the people beeame rich in .paper money but starved in goods'. This is plain nonsense. At no time in New Zealand's history did our people enjov greater plenty than they experieneed in the vear before the war. They were better fed and clad, better in health and better equipped in every way in all the comforts and amenities for their homes. Wliy is it Mr. Lefeaux refrains from mentioning New Zealand's amazing success in finaneing the war? Has he failed to observe that the Government, backed by the people in their contributions to the war loans, succeeded with a minimum of recourse to the Beserve Bank in finaneing the war which eost New Zealand £574,000,000? Moreover, New Zealand has paid for every penny of its overseas war costs and has, in addition, reduced the overseas debt by more than £40,000,000. From the September, 1939, to March, 1940, war period, the total of Beserve Bank advances and investments in New Zealand increased by only £11,400,000 for all purposee. "This record of restraint in expanding the Central Bank credit during the war is unequalled by any other bellig- j erent country. This is the basic reason j why New Zealand, more than any other j country, has nuiintaiued stabiiity oi" prices in spite'of tremendous price inPreases of iniported commodities, and has also maintained the best s'taridard of living iii the world. ' "If Mf. Lefeaux had been fair enough to meutioix tliqse facts, he would, of course, have cut away the basis for his criticism. It is to i>e regretted Mr. Lefeaux has taken his de- ' parture from New Zealand without pav- | ing a single tribute to the war elt'ort i of the people, eflficient contiol of the Dominion's a'ctivities, and wise financial policy of the Government. "1 desire to express syinpathy 'A'ith Mr. Lefeaux 's expr'ession of disnppointment and regret at the comparative failure of the task he had been called upon to nndertake wlien he eame to New Zealand. If he had taken a elear view of the desire of the people of New Zealand to go forward both in peace and war, to the liighest level of production aml best possible stamlard of living, he could, out of the wealth of liis experience, have made a worthwhile coutribution to the happiness of our people. Instead, he revealed his attitude througliout in that he preferred, at the vefy moment of his depar- I ture, to issue a siatement making a i hostile attack upon the Government, niisrepresenting the state of the coun- I try— and apparently without waiting j for a reply. Mr. Lefeaux is the unrepentant apostle of ari outworn 'creed. ' '