The Grey River Argus THURSDAY, September 16, 1937. PUBLIC CREDIT.

Grey River Argus, 16 September 1937, Page 4

The Grey River Argus THURSDAY, September 16, 1937. PUBLIC CREDIT.

By his opening' speech this session the Leader of the Opposition confesses an inability to see the possibility of creating public assets without creating public debt. He asked a series of questions which implied this. He wanted to know into whose debt the Government is going when it makes use of the public credit. He con. trasted the budgetary surplus with the dairy export account deficit, and said that the idea of creating assets without creating debt was “alarming.” That is undoubtedly the viewpoint of the money lending fraternity, but why it should be adopted also by the politician is less alarming than it is mystifying. The only explanation which suggests itself is that the Opposition is blind, either innocently or wilfully, to the basic principle upon which the banks and other credit controllers hitherto have been operating. Mr. Hamilton said that the Prime Minister’s use of the term public credit was vague, but that what -was implied was an inexhaustible reservoir, whereas public credit was built by' industry and economy. The reply of the Prime Minister may not suit the Onnosition, but it should satis-

fy everybody who is not anxious to perpetuate the system whereby a minority live upon the majority by the growing exercise of the gentle arts of usury. Mr. Savage points out that, contrary to Mr. Hamilton’s suggestions, there has been no gathering up of credits in the various public accounts, and nothing done which previous Governments have not done. The only difference is that the use being made of the public credit is to create assets, and, instead of g'O- . ing for the credit creating such assets to private lenders, the Government has used credit supplied

by the country’s own institution, the Reserve Bank. The creation of wealth through expenditure of money is the commonest process in the economic sphere, but if the Government, instead of a private capitalist, engages in that process, the Opposition appears to imagine, there is a nigger hidden in the woodpile. So far the public credit utilised by the Government in the way which is evidently questioned by the Opposition has been for the financing of the dairy marketing scheme and the housing scheme. This credit the Reserve Bank has afforded, and there is absolutely no warranty for the Opposition Leader to suggest that the Government is taking any risk it should not take. When housing or exporting is financed by private vendors of cred-

it, there is no complaint heard from the interests for whom the Opposition speak. In that case they reckon the advances to he excellent business, from the standpoint both of borrower and lender. Why should advances take on a different character merely because the creditor is public instead of private? It may be asserted that private credit controllers would drive harder bargains, but if they did, it scarcely could be said to be for the public benefit. The Primo Minister instances the leeway in housing, and public building, estimated at sixteen millions sterling, declaring that the only limitations on making up this leeway are real things, such as labour and material. Given these, he says, the country is only losing if it allows a lack of money to

stand in the way of creating the wealth which labour and material can be used to create. Thus the use of the public credit in so creating essential wealth is but a more intelligent use of such credit than where it is employed only in a way to increase the public debt. For every penny laid out, there is an asset being produced, and that use of our monetary system is the one best adapted to develop the country. Therefore, the further the Opposition may go along the line of questioning the use of public credit for national development, the more will they expose the mentality which has saddled New Zealand with the large debt which is borne by the public at present.