CORRESPONDENCE. UNEMPLOYMENT, AND HOW TO FINANCE NEW ZEALAND ECONOMICALLY.

Taranaki Daily News, 14 October 1921, Page 7

CORRESPONDENCE.

UNEMPLOYMENT, AND HOW TO FINANCE NEW ZEALAND ECONOMICALLY.

(To the Editor.) Sir, —Since the beginning of New Zealand as a Crown Colony, our public works have been carried out by borrowing money from England. Now this ■ policy was necessary in the early days, but I wish to point out that it is no longer a sound policy. It is becoming a serious burden, and to make that burden lighter is to increase the population and at the same time stop borrowing from outside countries. Also increase production, and give work to every man who is willing to work. That is true economy. You say, well, how is it to be done? My answer is: Establish a State mint and State bank combination. Issue State notes for the public works that are to be put in operation, viz., railways, roads, bridges, Wharves, hydro-electric schemes, schools and public buildings, buy up all the gold mined in New Zealand, mint it into gold sovereigns equal in face value to the British sovereign, also the silver. Place the sovereigns in the State Bank of New Zealand as the basis of a gold reserve, with State notes, silver and copper coinage in circulation. Make it so that no one can obtain this money without the equivalent work or produce. By this scheme the Government would pay no interest for the money, and tha whole scheme would be backed up by the national wealth of this Dominion. Under it there would be no unemployment. As long as a man was willing to work there would be work to be done. By this scheme immigrants could be easily absorbed in this Dominion. There is any amount of work to be done in this land, and all it wants is a free circulation of money, otherwise State notes, to make this country progressive. We are all inclined to the idea that to economise is to save, and we will be prosperous. Now, supposing 1,000,000 people in New Zealand decide to save £1 each per annum and put it away in a. safe place (not a bank). What does it mean? It means that there is £1,000,000 per annum out of circulation. Xow this amount, instead of providing work, is laying, as it were, doing no good, whereas if it were in circula tion the result would be progress. It is a false idea to reduce men’s wages. This is fqlse economy. It causes hardships in many ways. A better way would be to equalise the currency value of all nations we deal with, or barter with, with that of our own currency values. We should also regulate our imports so that they should not exceed our exports at the end of any year. This would keep us always financial with outside countries. I might «lso add that State notes should only be used strictly for circulation in our own country. As an illustration of our present crippling method of borrowed money, suppose A has £5,000,000 to lend the Government at 5 per cent. Well, it costs for a start about 1%, or, in other words, £25,000 to float the loan. The interest will be a-250.000 per annum. In twenty years the. people have paid in interest alone £5,000,000, and they will still owe £5,000.000 to A. What have they done? Well, they have made A worth £10,000.000 instead of £5,000,000 in 20 years, and he has done nothing for it but sit and wait. He would not have lent us the £5,000.000 if it had not been backed by the people of the Dominion. Then why does the Government not is- i sue State notes to the value of £5,000,- ! 000, backed by the country ? Then the £5,000,000 interest would pay the principal in 20 years at 5 per sent. —I am, etc., PROFIT.

(A beautiful dream, but only a dream. To buy up the gold required as a basis for State note issue would mean the country having to find an equivalent ayiount of wealth, and to issue notes would only depreciate the value of the currency. That is to say. supposing the note issue were increased by 50 per cent., the value of the issue would be depreciated by 50 per cent. The point to be remembered is that, unless goods or produce are created to the value of the bank notes or paper issued, the currency suffers proportionately. It cause* the inflation which is at the bottom of many of the ills from which European nations are suffering to-day. The Bolsheviks of Russia, of course, did not believe in old-fashioned economics, and sought a short, cut and turned out money—paper money—by the bale, with the result that the money has ceased to have any purchasing value. To regulate our imports so that they should not exceed our exports is impossible, as anyone with an elementary idea of commerce knows. Any interference with or infraction of ordinary trading conditions or economic laws only results in loss or disaster, as the experience of the last few years in this country conclusively proves. Our correspondent's other arguments are equally unsound and untenable.—Editor.)

RIVAL ROUTES

(To the Editor.) Sir, —As my remarks in answer to Mr. Whitton's letter re rival routes from Ohura to New Plymouth, at the Clifton County meeting, as reported in your paper, may not make it clear as to what was really in my mind, I would like to explain further that I was expressing what settlers thought as to which would be the better route, not quite my own idea re the Waitaanga— Mount Messenger lino. As a settler on that line, I, of course, favor that, but as Cr. Barnett was laid up at the hospital, and as he wished me to keep an eye on his riding affairs while ill, I felt, as he supports the opening up of the Moki Road, that it would only be fair to him to place hi* views before the meeting, and as part of my riding —the Mokau—abuts on to the Moki Road it would be unfair of me to use my position for my personal interests against other portions of my district so supported, both roads having the support of the council. Of course the work is being done by the Government. Both routes have their barriers, the Waitaanga grade and Mount Messenger on the one hand, and the Moki saddle, and Tatu to Tangarakau hills on the other. Mount Messenger will be metalled soon, of course. Mr. Whitton need not fear much, as the Tongaporutn —Ohura Road Las been so far advanced as to only require about 3 miles of forming to finish it, and that was the reason I urged the £6OO grant being asked to be put on again to help finish the three-mile barrier. The Moki road needs many more miles of forming than the , road through the Tongaporutn—Waitaanga district does. The settlers will soon settle which is the better route when both roads are finished. Doubtless those

from Ohura westward and Waitaanga will use the Ohura—Mount MessengerWait aanga line, while those, settlers on the east from Tatu—Tangarakau —Tahora will use the Moki Road. Both roads need completing, and the Waitaanga line should not take long now if money and labor are available. —I am, etc., F. C. JONES. Kotare, October 10.