IN DEFENCE OF INTEREST.

Auckland Star, Volume LXV, Issue 45, 22 February 1934, Page 6

IN DEFENCE OF INTEREST.

A week ago both "Plain Bill" and "Per Ardua" argued that interest was -unjustifiable because money was imperishable. Now they both admit that money is perishable, but unblushingly insist that their original conclusion still stands. "Per Ardua," it is true, attempts to escape to the airy regions of ethics, but even there it is an advantage to have one's premises correct. He suggests that I knew that lie was discussing interest as a matter of ethics, not of economics. But in his former letter he asked, "Is it (the charging of interest) sound economics?" and proceeded to ascribe the present and past depressions to interest. Though this may not be economics, I am sure "Per Ardua" intended it to be taken for such. If "Per Ardua" objects to interest on an ancestor's wealth maintaining several generations of descendants he should rail against inheritance and not interest. Both your correspondents fail to appreciate tliat interest is a price and will fall, as it is falling to-day, in the face of large accumulations of loanable capital. It is true that when the supply of savings is monopolised, too high a price can be charged, but this is an argument against monopoly, and not against interest. Have "Per Ardua" and "Plain Bill" realised that no one is compelled to borrow ? Every man is free to choose whether he will wait and save for himself or pay some one else interest. Most of us are too impatient to wait. H. W. HADDOYV.