OTHER PEOPLE’S IDEAS

Wairarapa Times-Age, 8 October 1943, Page 4

OTHER PEOPLE’S IDEAS

MONETARY POLICY (To the Editor) , Sir, —With your kind permission I would like to reply briefly to Mr M. Whimp, who claims to be one who believes in monetary reform, but appears to me to be rather timid of his own beliefs. He appears to think that a Government which had the courage to control credit and currency would take over all mortgages when the contract with the private investor expires. This could not be done like the switching on of an electric light, for the volume of currency would only be increased as the people's ability to produce more goods increased. Once an equitable price level has been established and all surplus labour has been absorbed, and . i. | reasonable consumer demand has been met, additional money would only be issued as physical production increased. Furthermore, Mr Whimp stated that what would be a distinct gain to most would be poor compensation to many. He should have -said “poor compensation to the few—those who have the power to create credit,” not “to the many.” However, it is an admission that it would be a distinct gain to the vast majority. He further says that the policy is unjust to the private investor, because when his contract expires his will have no value. The only true and correct basis for money is a “commodity index” ' for same; therefore the investor’s money have a stabilised value —something lit never had before, when, under private control of banking, we witnessed periods of inflation and deflation and in such periods the investor never knew for certain where he stood, or what was the value of his money. What of the investor who had his investment perhaps half cancelled otftt under the Final Adjustment Act? Was he subsidised or compensated in any way? In regard to the effect on land values Mr Whimp, in an earlier letter, was very worried for fear that land values would rise enormously due to the low rate of interest suggested by the Democratic Labour Party, for the rehabilitation of the returning service men, to which I replied to earlier and evidently too effectively for my friend, as he now claims that in justice, either the land prices must rise or the seller must be subsidised. I do not think my friend knows whether he is coming or going. As we are all part and parcel of a cooperative socinety, one section dependent on the other, what is wanted is a monetary system which will give more justice for all.—l am, etc., R. E. CRAWFORD. Featherston, October 5.