OUR CREDIT

Taranaki Central Press, Volume IV, Issue 426, 6 May 1937, Page 3

OUR CREDIT

LABOUR’S POLICY Socialist Trend The latest, air mail brings the article from the London, Evening Standard of April 12, which contained a criticism of New Zealand’s credit. "Mr W. Nash, Minister of Finance, replied to the criticism in Lo.n, don the following day. The article reiads at follows “Reports recently received in London indicate that Australian as well as British investors in New Zealand are withdrawing their money from that country. Others are delaying the investment of further moneys’ until they know to what extent businets is going to be damaged by Socialist legislation. "If the present tendencies continue there is little doubt that New Zealand 1 bonds issued in London will be adversely affected. The total of the.sa New Zealand issues outstanding here is £-136,000,000. "Of this total £17,000,0.00 matures in 1940. It is fortunate, perhaps, that, there are no earlier maturities; otherwise there would be great difficulty in replacing them on the 31 per cent basis, the rate which they now carry. Extent of State Trading.

"Mr Nash and his asroc'iates. in the Government, haye devised plans whiph they 'think are wise and wonderful. State trading is to be carried on on a vast scale. Everything is l spi-d' to be designed to asiist the under dog iand those in control fail to recognise that no tax or burden can be levied on the rich without also hurting- the poor. “The advice of well intentioned capitalists or men of business Is being ignored. None of those men of high integrity are given credit for good intentions and public spirit. "Only the views of experienced idealists and fanu'.ics are given any consideration in New Zealand to-day. "Accordingly not only should investors not purchase New Zealand Government Bonds', hilt they should avoid securities, of commercial enterprises dealing exclusively wLh that country. Gus-ranteed Prices. “An important part of the legislative programme establishes cumbersome machinery to guarantee to farm, ers the payment of a price for their products wh’ph pe'rmanent.Ly covert their cost of production, secures to them an income adequately remuner--ating them for their labours, and guarantees to them cash returns which will increase progressively With the increase of their production. “This system of guaranteed prices is to be effected by tile Government taking- over and marketing any produce they think fit, paying the producer his guaranteed price, and then selling his products in the open market for what they will fetch. “This; notion presumes that NewZealand' can control prices for her produce in the world markets. It presumes also that all farmers are equally well situated for production and that they are all equally efficient. The Cost of Living. "If world prices fall, however, and New Zealand’s Government finds that nines trading of ‘this kind cannot be done profitably, then the gap between price received from abroad and thq price paid to the farmer can only be made up by inflation. “This increase in the output of paper money does not increase the volume of exchangeable goods. It increases costs iand reduces the ability to purchase goods from abroad'. This in turn increases th 6 cost of living, ami brings' hardship upon the people. "It is to be hoped that Mr Nash will realise the danger early enough to prevent such a situation as developed a few years ago when some of the Australian State Bonds were difficult to sell even at 30 per cent, of their face value.”