WAR DEBTS AND LAND

Evening Post, Volume CXIII, Issue 2, 4 January 1932, Page 6

WAR DEBTS AND LAND

(To the Editor.)

Sir, —The article on page 11 of your Thursday's issue, dealing with economic events of the past two or three years, was most lucid and explanatory. The writer is to bo commended, both for his candour, and for his wide grasp of the subject. Nevertheless, he makes no attempt to locate the exact cause of our troubles; nor, by direct statement, to point out a remedy. It may, perhaps, be thought by some that the article needed no comment, but there are still prevalent plenty of fallacious methods of accounting for the depression. One of the most outstanding beliefs is to ascribe the slump to the burden of war debts and reparation payments; but this is far from being correct. A fair analogy is that of a man holding a good position buying an ex-, pensive car on instalments, and then losing his position. Clearly, the payment of his instalments will drag him down, but his troubles are not due to this, but to the losing of his position. So with nations, every country could pay its war debts if they would only set their affairs in order. lam not here justifying the payment of war debts, but simply disputing that they are the cause of the world depression. Germany's perilous position to-day is due to the same cause that has brought the victorious Powers low, that is, to land speculation. Since the war Germany went in tremendously for land speculation, and her 7,000,000 unemploj'ed army is due entirely to this cause. Had the great Bowers said to her in the beginning, collect the economic rent of your land for your revenue, abolish your 'Customs and other taxes on industry, cut out your expensive liight life, your army, your navy, and your millionaires, Germany to-day, in spite of reparations, would be happy and prosperous. But the great 1 owcrs, Jor obvious reasons, did not say this. Your contributor hits the nail on the head when he attributes the depression to the "get rich quick" fever. The desire'to evade the primary law of nature; to earn our living with the sweat of our brow, leads to gambling and speculation. Now gambling, even when confined to horse-racing, cards, etc., is a reprehensible vice. But it is not confined to these things. Land, which in every country should be held in common, has been allowed by governments to become private property. The unearned increment of .d? d. ue io tlle unfailing progress of civilisation, has thus provided an immense scope for speculation. Land being a natural monopoly and. a vital necessity, there is a wide difference between laud speculation and ordinary gambling Gambling ruins individuals, but laud speculation ruins-nations. The economic rent of a country should rightly be regarded as-its. natural revenue, but not only have governments ignored this, but riotous land speculation has succeeded in extorting an utterly unjust proportion o£ the national production for its share. Two great retributive effects result from this. First, the great masses of the people, robbed of their spending power, bring to nought the great industries that originally built up the speculative land values; and second, the fictitious price of land, whether rural, urban, or mineral, tends to bring all production to a stop. The folly of governments in increasing the taxes on labour and industry in the vain endeavour to save the great landed interests but aggravates the evil. To assert that the additional taxation is imposed in the interests of the farming community is clearly n. perversion, for what is killing the farmer to-day is his mortgage commitments. Any relief given to him at the expense of the rest of the community simply completes the ruin of his market, and goes past him to pay his mortgage dues. The maintenance of fictitious land values alone is encouraged. Sir, it is not yet too late (but soon will be) for our Government'to cease copying the follies of Britain and Australia, and to reverse its policy of taxing labour and protecting monopoly. It must take, and that speedily, the full economic rent of New Zealand for its revenue, and abolish all forms of taxation that fall on thrift and industry;-0n1y../tiros' will the otherwise inevitable crash be avoided.—l am, etc.,

R. A. GOSSE.