INFLATION OF £ STERLING CAUSES INSIDIOUS LOSS.
BORROWERS PAYING PREMIUM OP SEVEN SHILLINGS IN £. The effect of fluctuations in the value of the £ sterling upon our purchasing power was stressed by Mr L. Ashcrof tEdwards, of Wellington, in the course of an address to the Palmerston North Citizens.' Luncheon Club recently. Dealing with business conditions in the Dominion at present, Mr Edwards stated that an insidious form of loss not often recognised by business men, was brought about by the varying value of the £ sterling. The trouble was that a business man reckoned his capital in terms of £ sterling, forgetting that this same unit was as variable as perhaps the pound of butter on the shelf, as far as value was concerned. A man might reckon his capital at £50,000 when, as % matter of fact, he had nothing like that, amount because the £ was not worth 20s. Following the war, there had been a trade boom which had been marked by an orgy of borrowing. Governments, local bodies, borough authorities, had all borrowed, not considering at the time what it meant Avhen the loans had to be repaid or interest met. The £ sterling after the war had been equal to only 10s in 1914, therefore money values had been inflated. To-day, borrowers in the post war period, were paying back a premium of 7s in the £ as a result of this inflation. That meant that borrowers were paying 278 for every £1 borrowed after the war. This was an insidious'loss which did not appear in books and was not often 'stressed chough by, accountants and economists. It was a leakage which, while not apparent, was being paid for at the present time.
Permanent link to this item
Hononga pūmau ki tēnei tūemi
https://paperspast.natlib.govt.nz/newspapers/SNEWS19290705.2.27
Bibliographic details
Ngā taipitopito pukapuka
Shannon News, 5 July 1929, Page 4
Word count
Tapeke kupu
281INFLATION OF £ STERLING CAUSES INSIDIOUS LOSS. Shannon News, 5 July 1929, Page 4
Using this item
Te whakamahi i tēnei tūemi
Copyright undetermined – untraced rights owner. For advice on reproduction of material from this newspaper, please refer to the Copyright guide.