Letters to the Editor

Hawke's Bay Herald-Tribune, Issue 100, 14 May 1937, Page 7

Letters to the Editor

W.

SISSON.

;Banking Contrast (To the Editor.) Sir, — Your recent editorial touebing gold values was of great interest. It is hard to visualise gold as worthless, as your sage intimates, but nevertheless there is ever^ indication of gold falling -in value. And, strange • as it may seem, it will improve in commercial use as it reoedes in value. With world return to confidence, material assets will become a rising proposition, so gold must. fall in aympathy and automatically falling gold will be dropped for preference m rising assets. These remarks . are not theory but axioms. . The cause of gold rising to a state beyond general use is eimlpy a worldwide banking . shortage in liquid r'eserves, sufficient to support an unpreoedented world credit advance. •Sound banking means to hold cash reserves relative to credit advances. ■However, conditions to»day are altered, much of that credit has been wiped out or lost. !For this reason it is just a 'ehame that the New Zealand electors have returned a Government with. beliefs opfenly hostile 'to capital. Nothmg but this' unfbrtun'ate vote has held this country from being in step with hounding Australia. The CommonWealth is alive with internal expansion in new industrial ventures, her-trading banks are all out to cope With new and rising business. This is the second time the banks have become conserved for their cash reserves ratio, which may even force thein to again raise interest xate or restrict advances, perhaps a little or both. Such is the state of activity which makes Australia a souhd investmqnt, for so sure as capital is drawn into the living stream • of industry so m.ust employment dissolve. In this the lagging conditions in New Zealand is fast drifting to a contrasting divergance. ^ The psychology of the labour mind is puzzling, yet having no affinitj to capital, the blood stream of commerce, no fusion or co-operation can be looked for. Their one eye is set for division of wealtb, a policy which ring bark the tree of progress. This letter has been compiled aolely to help tb aWaken the business man to the reality of that old time spirit of responsibility without which the national endeavoUr must fall ehort.— Yours, etc.,

Hastings, May 8, 1937.