OTHER PEOPLE’S IDEAS

Wairarapa Times-Age, 23 October 1943, Page 4

OTHER PEOPLE’S IDEAS

MONETARY POLICY ■si- • (To the Editor.) Sir, —Mr Whimp says it makes very interesting reading when I say what is wanted is a monetary system, which will give more justice for all and that I had failed in my efforts to show how justice for all can be secured under a policy of State interference with private investment. “There are none so blind as those who do not want io see.” I have never suggested State interference with private investment. My suggestion was that the right to control credit and currency should be the sole prerogative of the State. Mr Whimp, in his first letter, was very worried -for fear that land values would rise enormously, and when I replied and stated one of the many methods by which this could be controlled he evaded this issue in his later reply, because no doubt it suited his argument to do so. Furthermore, 1 drew attention in my last letter to the position of the investor who had had portion of his investment cancelled under the Final Adjustment Act, which. Act was necessary in order to get business generally speaking back on to an even keel; after a period of inflation followed by a period of drastic deflation. This issue my friend evaded when replying. I also stated the only true and. correct basis for money was a commodity index for same, when the investor’s, investment would have a stabilised value, something it never had before, but evidently it was more convenient to evade this issue also. I wonder if my friend had the power would he abolish the State Advances Corporation with all the attendant good that it has done and the opportunity it has given to so many people to set up in a home of their own or a farm of which they could gradually but surely attain the freehold. No doubt he considers (his State interference with private investment. I am sorry to read in his last letter that he considered the private investors were very naughty people. I consider these people good people. industrious and thrifty citizens and a very definite acquisation to the nation. It is very easy to sit on the fence dangling a foot on each side and indulge in wishful thinking as Mi Whimp is doing. By injecting enough money into circulation and m such a manner that it does not increase prices hut equates with prices, this is what I consider an immediate necessity and so does my friend. This can only be accomplished when the monetary system is reformed and the banks operate in the people's interest. Mr Whimp will have to lift, his right foot over and plant it squarely on (he ground on the same side of the fence as (he loft and face up to the fact that by injecting an increased amount of money into circulation in the correct manner the need to borrow money will be decreased, and by thus decreasing the demand for borrowed money the rate of interest would naturally fall. Furthermore, take the system of time payment, which I consider the dying kick of a "debt financial system." The purchaser is mortgaging future income to buy present day production and is paying exorbitant rates of interest for the convenience. In conclusion the natural fall in the rate of interest would be compensated for by (ho lowering of both direct and indirect taxation, the lowering of rates, the stabilisation of the investors’ investment and the increased purchasing power of the money thus received, due to a great expansion of production in both primary and secondary industries. To quote Mr S. Barclay Smith, he has estimated that the total Government (ax of this Dominion is £26 per head, equalling £l3O per family of five. So an income of £6 per week, £312 per year, is reduced to £lBO. The taxpayer. therefore, is working 21 weeks per year for the Government. What is more, under this ridiculous system, the tax (apart from war) is increasing by leaps and'bounds, and will, if allowed to proceed, become in another 50 years approximately double the present tax — 1 am, etc., R. E. CRAWFORD. Featherston, October 19. This correspondence is closed: —Ed.