GILT-EDGED INVESTMENTS

Auckland Star, Volume LXIII, Issue 72, 26 March 1932, Page 8

GILT-EDGED INVESTMENTS

QUESTION OF SACRIFICE,

(To the Editor.)

One of the arguments frequently advawi by advocates of compulsory interest is that lenders should not escape the s 2 sacrifice. It seems to me it is a serioususe of language tending to confuse the ;«'" to .refer to losses suffered through the den sion T>y other classes of the communitv sacrifices. Sacrifice is a voluntary th "* something given up for the sake of ano»f~" Can it be suggested that the loss suffered T' merchants, share speculators or farmer V reason of economic forces is sacrifice? 3 ft appears to me there is a strong tendency t overlook the essential difference betvL lenders and other investors of capital Th" lender deliberately forgoes the chance f increase of capital or high profits which nth forms of investment offer in good times for the sake of keeping his capital intact J£ an assured though moderate return on it times of adversity. The borrower knows th'" and cheerfully takes his money on that under* standing and pledges his resources that th" lender shall have what he bargained for If adversity comes and the lender is asked h the borrower, or forced by the law to refram from utilising those resources for the purnose for which they were pledged, then he is bei™ asked or compelled to make a sacrifice in ths true sense of the word. It may be necessarv for the general good to force lenders to suoh I sacrifice, but, in doing it, it should not be over looked that they are being deprived of some thing they were deliberately promised viz' an arrangement which is proof (as far as the borrowers' resources can make it) against bad times and that they (the lenders) will be tie victims of broken promises, whereas the majority of sufferers by the depression are only the victims of unfounded expectations a very different thing.