A PRACTICAL SOLUTION.

Auckland Star, Volume LXIII, Issue 209, 3 September 1932, Page 8

A PRACTICAL SOLUTION.

STATE CURRENCY ADVOCATED. (To tie Editor.) _ Many solutions of the depression problem have been submitted —all more or leas befog, ged by intricacies. But one stands out clear above all others. That is State-printed easy currency loans to industries. I will submit ill contrast two ways of borrowing money and ask you to discard the first and adopt the second: (1) Borrow £1000 from a bank or other private lender at (if possible) 5 per cent interest, and in fourteen years the interest compounded will have been enough to repay the entire loan. Yet you still owe the bank the £1000. (2) Borrow £1000 from the Government in State-printed currency at 5 per cent interest, and,in fourteen years the interest will have entirely repaid the loan, leaving you quite free of debt. The State currency cost practically nothing to print and the interest will have redeemed it. This currency will, of course, be made legal tender by Act of Parliament,just the same as ordinary bank notes. Cbnsider the encouragement this easy money would give to all town and country industries and the keen demand for workers. I would favour the State in many cases converting existing private mortgages, which would delight many mortgagees and also the mortgagors. The policy, by restoring prosperity, would increase the value of existing securities in the hands of private lenders and create new avenues of activity for the banks in compensation for their loss of some lending business. The test of such a policy is this: (1) Will it' restore industries and employment adequately and quickly? (2) Is it financially and politically sound? (3) Is there a better way? I would like to 1 see persons advantageously placed for the- purpose starting a movement to get this solution enacted by the coming session of Parliament. The problem far transcends the Ottawa subject in importance; and, indeed, the Ottawa advantages cannot be properly exploited without some large system of financing. The alternative of foreign borrowing is unthinkable. We cannot endure more debt. The community's loss in earnings weekly makes this matter the great overshadowing problem of Parliament, and every week's added loss makes the delay a tragedy. ARTHUR SAINSBURY.