A REPLY TO MR. W. J. BIRCH.

Dominion, Volume 2, Issue 587, 16 August 1909, Page 5

A REPLY TO MR. W. J. BIRCH.

Sir,—Mr. W. J. Birch's letter, which ap-, pears in Wednesday's Dominion under the heading, ''Taxation Fallacies," is a good illustration of how 'harrow and contracted is the vision of, the mass of mankind regarding jproblems in currency, banking, and• •.£<•' nance. , Mr. Birch in his short letter makes two assertions, both of which arowrofag.' Ffrst, he asserts-that "Either directly or indirectly the expenditure money must neoessarily' employ labour,"-and secondly, states that.."lt is quite lost sight of that if you-.take:money in)the,',form of ; taxatipn'out'j of the.pockets!6f.ahy.'.cldß3 v 6r..the community, the community as a whole is so much poorer." With regard , to the first/assertion that all money expehded must .necessarily employ laftour; this only holds good while the money: ■is expended either in the payment of .wages to 'produce more wealthier in' purchasing wealth producedr by ■ labour. . But, there is % ; another way of expending money ;which Mr. Birch has entirely lost eight of, and that is .in the.purchase of land. Now, when money is utilised for the . purchase of > land ■ thai money is not used in any' shape ior i form •in iho employment of labour;, ahd,ioonsequently, l as land goes up. in price,: the employment of 'labour, or": the l , wages'paid,; has .to be' par'tailed.' Consequently/ the ipurchase of land ',at such prices that;only, tho n poorest,wages icaivbe;paid^rafter-interest,upon the..purchase price has been,provided for, impoverishes.thd ,mass of ,tho. people iastead of them, besides causing manufacturcra "and producers generally, to ( .have an' ever-increasing difficulty in getting rid of ;their stock, on account the general shortage, of money among wage earners, caused by' the money used in paying for; land not. being used in tho, pur-' ohase -of wealth which.labour' has produced. With regard to' Mr. Birch's second assertion it mnEit be obvious to an unbiassed mind that Government'taxation no more impoverishes ■ the community-as a whole than does taxation in the snape of'interost and rent by private indiridnals. Besides ,-_provided money taken, in taxation is immediately expended in the production of useful public works, it is obvious .'that, such taxation enriches the community as .a; whole, instead of impoverishing it; For as a ; who)o does not.become .■rich'by saving money,,but by judiciously'.oxi pendingUufficient to keep all labour usefully, employed.— l am, etc., : . . ... ... , \ ■ v :C; ?.,W.,;LQNGDILL.: .