A CENTRAL BANK.

Auckland Star, Volume LXIV, Issue 237, 7 October 1933, Page 8

A CENTRAL BANK.

"Pair Play" should be more self-reliant. The world is moving fast. This depression is but the pre-natal pains attendant at the birth of a new world. Old institutions have failed to accommodate themselves to the new circumstances, so a new institution lias to step into the breach. Such is the proposed Central Bank. The old banks were concerned only with profit. Let them remain as euch but this bank's sole concern is the economis necessity of the people. The old banks failed to attend to this important function and npw feel hurt because this power that they had is to be taken away from them. To them was given this sacred charge of attending to our economic necessities, but as they wera predominantly foreign (four Australian, ono English and one New Zealand) local economic life was placed subservient to their commercial interests. The proposed Central Bank smashes at one blow this foreign yoke. When notes are issued to the economic necessity of the community instead of being contracted to a self-centred policy as at present, then there will be sufficient of these "mediums of exchange" in circulation to allow the stream of trade to flow unimpeded. The lubricant of an engine is not the source of power, and it is not the work done, but it is essential that sufficient of the lubricant be supplied to penetrate to every portion of the engine. An engine cannot run without oil, and a country cannot be run without money (mediums of exchange). If these counters are deliberately reduced, as they were by the action of tho banks, then the community has to try to struggle along on less. There is not sufficient to go round. The worker is reduced from five counters per week to, say, only one and a half. His moral contract is broken, he has to break his legal contracts, and so the repercussion travels on from one section to another; whereas when sufficient are kept in circula- - tion the sanctity of contracts is maintained, There is then no tmemployment. Perhaps "Fair Play" believes all the work in New, Zealand has been finished. This is far from

the case. As for "no more foreign trade,'' New Zealand does not require her currency for this, She can use the credits secured from the sale of her surplus products to conduct her foreign trade. Taking last year's trade with a central bank, our trade could have been conducted on the following lines: Export gave us foreign I credits for £37,000,000; imports paid with, foreign credits cost £23,000,000; trade balance, £14,000,000; interest charges, etc., £10,000,000; credit balance, £4,000,000, which would have been available to purchase and pay cash for such materials as might have been required for public works in New Zealand. Where are the shackles of foreign financiers when we have the money to pay cash? GEO. V. MULLENGrER.