New Zealand’s Problem

Dominion, Volume 28, Issue 89, 9 January 1935, Page 11

New Zealand’s Problem

Sir, Mr. Wilkin’s letter in your issue < t January 3 endeavours to make it appear that I am under the impression th"t ihe income of the people of New Zealand is reduced 33 1-3 per cent, by the high exchange., I have previously stated that it is robbing Peter to pay Paul, or taking Hom one section of the community to give to another. How then can he maintain that I reason the total income of the people is altered? Taking from one Aew Zealand pocket to put in another ixeiy Zealand pocket does not increase the national income. By having to pay additional, high prices on imported goods, many being necessities, such as tea, sugar, cocoa, coffee, salt,, the spending power , the classes outside the primary pro(.ueers is reduced; but let us not confuse epending power with total income of New Zealand. A great part of the amount ‘ raicsed to subsidise producers has gone to those who do not require assistance. If it is possible to put iu a means test for relief workers, what a farce to suggest it is a.most impossible to apply a means test to relieve primary producers. The idea of a farmer (not needing the bonus) spending the bonus for the benefit of general industry, when he already has enough for that purpose, is going to th" »Hnw Of . rK / , 1 Cn J> oUSnees - Mr ' Filkin asks ."- 011 the wealthy mortgagee be stopped from collecting the export bonus from perhaps a hundred small farmers’” I he wealthy mortgagee is not collecting a bonus from, small farmers or big farmers; he is collecting his debts due to him iUid the purpose of the high exchange is to assist producers to pay their debts and be able to live. It was not the object of the subsidy, as Sir. Wilkins en<?eavours to make out. to increase the velocity of credits, but it was put through the House for the purpose of assisting producers to retain their farms and stock by increasing the prices realised lor their products.

I hope Mr. Wilkins is convinced that it is unnecessary for the Reserve Bank to buy produce at 1/- a pound and sell it for 4(1. a pound. What perhaps may be necessary is for the Reserve Bank to guarantee 1/- a pound and the Reserve Bank to, issue free of interest such amount as will be necessary to pay producers 1/- a pound after the result of the season’s sales has been ascertained. To fix an arbitrary price for local butter at 4d. a pound does not seem to be a good idea any more than allowing local prices to rise to 1/3 or 1/6 a pound. Our main obiect from now on should be to cease paying interest on Goyernment loans ef any description and use the Reserve Bank to issue Government requirements on the nation's credit free of interest to New Zealand taxpayers.—l am. etc.. EQUITY. Wellington.