INTEREST SYSTEM UNSOUND.

Auckland Star, Volume LXV, Issue 25, 30 January 1934, Page 6

INTEREST SYSTEM UNSOUND.

H. W. Baddow's attempted justification of tlie interest system will not hold, "water. Interest has not survived because it "equates the demand for savings with the supply." It has survived mainly because it satisfies th« selfish desire of men to get something for nothing, because it enables the "haves" to live and grow rich at the expense of the "havenots." If there was no interest, money would still be saved by individuals to provide for old age, for unforeseen emergencies, for future capital expenditure on large purchases, and to bequeath to their dependents. Businesses would save it for reserves, replacement of plant, buildings and extensions. Municipalities and governments -would save it for similar reasons. The argument that those who save are performing a useful service to the community and should be paid for it in the form of interest is equally unsound No one should receive wealth that he has not created. If I do £1000 worth of work during the year and am paid £1000, I have earned £1000 and no more. If I invest that £1000 at 5 per cent 1 have at the end of the year '£50, which I have not earned and do not deserve. Some other man has earned that £50, but I receive it and enjoy it. Perhaps I invest it, and so receive another lot of interest, which, doubly, I have not earned. Truly is interest legally called "unearned income"! An ancestor of mine accumulated £10,000, which his descendant* have lived upon in idleness and luxury fbr 200 years.. One would imagine the £10,000. would, be considerably reduced by now. Not at all—it is now doubled. My ancestor's descendants have spent his fortune many times. Or rather we have enslaved others, by usury, and lived upon their labour. Is this justice? Or even sound economics? The enormous aggregations of capital interest has encouraged have resulted in the over-capitalisation, of industry and a monstrously unequal distribution of wealth. These in turn have caused' this depression, and many .past depressions. If there was no interest and the amount of capital any one man could hoard was limited by law, the main incentives to exploitation— the strong preying upon the weak—would be removed. To conclude, the continued existence of the interest system does not—as Mr. Haddow contends —prove that it has a genuine function. Many evil things have survived from the Dark Ages. Murder, for example. Others have gone, like slave owning. Let us hope all will go, in time. PER ARDUA AD ASTRA.