The Taihape Daily Times AND WAIMARINO ADVOCATE. SATURDAY, SEPTEMBER 18, 1920. BORROWING AND SPENDING.

Taihape Daily Times, Volume XII, Issue 3582, 18 September 1920, Page 4

The Taihape Daily Times AND WAIMARINO ADVOCATE.

SATURDAY, SEPTEMBER 18, 1920. BORROWING AND SPENDING.

Witfo TV*bidli is incorporated “The Tai&ape iPost and Waimarino News,"

This ; peiiod of the history of this country’s business and finance is not very far removed, from the time when individual and even local bodies thought largely in shillings, and there are, unfortunately, too many people wh© do not realise the importance and significance of the change ' that has tdken place in this connection. They f do not recognise that the sense of discrimination in values is being perverted; present-day individuals and local bodies, and even the general Government talk about thousands of millions of pounds more glibly and with 1 less thought than the last generation talked about hundreds of pounds. Is the world so much richer? Is there more of the circulating medium"? If not, what else but paper undertakings is rapidly pushing the metallic currency into the backj ground, out of use, Is it not an ob- | vious fact that a few interested people to-day can involve a whole community in debt at a time when commodities are dear and money'is cheap, as though commodities were for ever ■going to constitute the standard of value? People who stand unconcernedly by while the few load them with debt are not frankly told that they will have to produce~sbme l hing-like twice teh volume of commodities to pay back what they are borrowing now. Currency has already commenced to appreciate, and it is as certain as that night follows day that New Zealand products will fall back in value to little more than half of that they stand at to-day _ ItTs true that higher-priced labour in many countries will tend to keep vdlues up, but it must be remembered that'labour like everything else will ultimately be governed by laws of supply and demand. There are yet many countries on earth that are s‘ill tremendously overstocked with labour, anil it is inviting disaster for labour or capital to assume that such countries will not‘take a prominent par 1 - in determing world values. In this speck of land above water in the South Pacific Ocean people are exhibiting the idea that they constitute a world in themselves; they are borrowing with a spirit of abandon. A farmer 1 that borrows to purchase wire and; other high-priced imported commodities to-day will have to raise very' nearly double of what ho now pro- : duces to pay that loan back when it | becomes due. He may not be fully j conscious of the fact but it is a fact; nevcr-the-less. and he may more correctly recognise the folly of borrowing while commodities are high-priced and money is somewhat depreciated, when he finds that he is impoverished hy what ho will then call a market of ruination. In thp recent past commodities have been dear and cheap, the present is a transition stage, there is a tendency for commodities to take a. downward path and for money to increase in value, for i: is impossible for both to increase in value, as money is only worth what it will buy in the necessary commodities of life. T‘ is as well to go over these old principles of political economy occasionally so that the country may not be entirely given up to a senseless abandon which is highly productive of social, poli ical and industrial evil. There are men who are thoughtful and careful of their personal affairs, but they will display a criminal neglect of and about the finances of the community of which they are a part. There is appalling waste of public money by people who should never have been entrusted wi h Us control. If all other

aspects <bf wastefulness are avoidedihat otf spending when commodities purchased are dearest, and raising money to repay debts coniracted when the general taxpayer is least able to find it is ignorantly persisted in. Money has, in fact, been r so plentiful as a result of high prices for what this country has to sell, and as a result .of Government profligacy in the land market, that people generally have forgo ten its relative value in connection with supply and demand, whether that supply and demand be natural or engineered by combines. No better instance of abandon is. the maker of money is now current than the raising of a municipal loan in Wellington, last 1 Wednesday. Millions of money are talked about as though they were millions of jnarbles or common stones; people ’have become financially hypnotised, they say let it "come in, never mind about settling day. The great mass of workers are displaying almost an utter disregard of what money Is borrowed, the more the better from their point of view, and hang the consequences. They have 'become cognisant of a lack of that honesty that in earlier days pervaded public finance they are disgusted and hold aloof. On the Wellington Municipal Roll there are 21.265 names and yet a little over 3000 people decided to put the City in debt, by loan, to the extent of about a million and three-quarters of money, and it is repor;ed that the Mayor of the City is proud and Pie designates it a great win that only three thousand ratepayers out of 21,265 should have thought it worth while to give their sanction to adding such an increase to the already heavily pressing burden of taxation. For apart from the question of whether extension of the Municipal area made such a loan necessary, there was an appalling, disturbing, disheartening exhibition of abandon regarding community finance. Only a little over 5000 voters went to the poll, while about 3000 of them put a debt ot over 1,700,000 on the shoulders of nearly 20,000 people who did not think it worth while to vote at all. If such interest in Municipal matters constitutes cause for pride and gratification, carelessness about the future is more dangerously widespread than sane people could have thought possible. It is our opinion that the purposes for ..which the Wellington :CRy Council raised the loan fully justified its success, but the interest displayed by ratepayers is certainly nothing to exult over. There is an evident tendency to borrow wherever possible, and r is somewhat surprising that after the waste of war there should be men who did not fight, and yet have accumulated such huge riches that they are able to lend to impoverished countries and communities to such an extent that taxation per head of peoples has already reached an unprecedentedly alarming stage. Yet, borrowing and increase of taxation must continue, for neither the ■British Empire, or any o'her Empife has evolted an3 r other scheme of recovery than tnat of seven-eights of the people becoming taxation slaves to the other eighth. Common people have been educated up to an understanding of the situation, and they are casting about for means whereby inequalities of citizen-ship may be eliminated. Is there yet a dominant commonsense that can avoid anything approaching the means adopted in Russia'!