"CHEAP MONEY"

Hawke's Bay Herald-Tribune, Issue 75, 15 April 1937, Page 4

"CHEAP MONEY"

"The world has not previously earpericnced a pfeiiod whfen borrowing rates haTe been so low for so long a tiine. If continued on thig basis an uuhealthy and artificial situation will develop. Easy money is a powferful force; it operates somewhat slowly, but to wait until it is cvident tbat speculation is out of hand will be to ereate conditions which can be corrected only by depression. In some quarters we are asked to believe that the increased Government regulation of general economy may make it possible to eontinue low interest rates more or less indefinitely. I feel strongly that this view is not correct and that the action now being taken is by no means premature. By use, if necessary, of the huge reserves already accumnlated it; will be possible to prevent any serious ifiterruptiOn in recovery. It is surely better tbat we maintain tbe upward trend for a prolonged period and tbat recovery sball proceed in an orderly manner, with the minimum of encouragement to irresponsiblfc speculation. We must on no account allow reeovefy to degenerate into boom — the forerunner of depression. Individua^istic e'eonomy will s'tand or fall, depending upon its abilitv to prevent depressionS," — Mr Morris Wilson, president, Royal Bank of Canada.