SANITY OR SANCTITY OF CONTRACT?

Auckland Star, Volume LXIII, Issue 58, 9 March 1932, Page 6

SANITY OR SANCTITY OF CONTRACT?

I am neither a "Public Accountant" nor a "Registered Accountant," but I would like to submit a few thoughts upon sanity of contract. When A. lent money and B. borrowed, it was assumed that its purchasing power would remain about par, and when it did not the bargain became inequitable and unfair to A. or to B. Were the rise or fall in prices to continue indefinitely one or other would be put out of business. This happened to the A. class in Germany when during the war the currency was depreciated in purchasing power, and the country is now in the position of lithe borrower, who cannot produce enough to. meet the bill. To impartially review the, interest rate at regular intervale, as the purchasing power of the pound sterling fluctuated from the date of the loan, would be a. eane, if not a sanctified, proceeding. Thus would tne life of the goose that lays the golden eggs be preserved, and that "confidence" which we are told is "the foundation of the financial structure" be increased, for, in the words of you* editorial article of the 19th ult., "The idea, that it would benefit the community to take millions from one section of the community, to give it to another is absurd. It upsets.the whole economic system of a country.' J-,* 113 absurd effect is produced every time p"«» fluctuate.