MONETARY POLICY

Wairarapa Times-Age, 15 November 1938, Page 5

MONETARY POLICY

PRIME MINISTER REPLIES TO CRITIC. PRODUCTION AS BASIS FOR CURRENCY. (By Telegraph—Press Association.) WELLINGTON, This Day. The Government’s financial policy was defended by the Prime Minister. Mr Savage, when he was invited in an interview last evening to comment on a reference to the finances of New Zealand by the editor of the “Rpund Table,” Mr H. V, Hodson, in a cable message from London published yesterday. New Zealand, said the Prime Minister, had always paid its way, and intended to continue to do so.

"We are just as anxious to safeguard the currency of New Zealand as Mr Hodson,” said Mr Savage. “Our intention is that currency will be based on New Zealand's production. We reaised long before reading Mr Hodson's article that to turn the handle and produce a lot of money without goods is not the way to prosperity and a high standard of life. “There are people in the world who think that as long as you keep on borrowing the question of inflation never arises. During a time of unparalleled prosperity the Government of the day was borrowing tremendous sums of money overseas and at the same time reducing taxation in New Zealand, but overseas writers did not get excited about that. We are busily engaged .in the preparation of plans for an increase in New Zealand s production which will have the effect of preventing the result that Mr Hodson seems to be concerned about.” Mr Savage said there were some people who would wreck New Zealand for the sake of wrecking, the Government. There was no limit to the length some of these critics would go.