PUBLIC CREDIT.

Auckland Star, Volume LXVIII, Issue 235, 4 October 1937, Page 6

PUBLIC CREDIT.

RETURN TO THE SOURCE. (To the Editor.) Your leading article of September 30 appears at an apt moment. A great number of people are wondering about the true implication of the term "public credit." The trouble is that the word "credit" is used in so many senses as to make its use vastly ambiguous. "To lend credit" may mean to lend money without goods. "To give credit" may mean to deliver goods without money, and so on. To say that "our credit in London is good" may mean that London financiers may consider us to be fit people to whom money may be lent. In fact in financial circles the word "credit" has a general "money-lending" implication. Apparently our present Government uses the term "public credit" from the money-lending point of view. It has been publicly stated that to borrow from the Central Reserve Bank is to borrow from ourselves and that no harm can be done by lending money to ourselves. If we are short of money all we have to do is to borrow from our own institution, the Central Reserve Bank; thus we will be owing money to our own institution, which is nothing to worry about. That appears to be the general idea. But unfortunately the problem does not stop there. After being borrowed, the credit (or money, or whatever you like to call it) will be spent. It will pass into the hands of individuals. What the public has a right to know is this: By what process is the money to come back to the Government in discharge? Now the great trouble about this nebulous talk i~ that it is creating a great deal of unrest, of apprehension. The State, if we may call it such, is to produce some quantities of cheap credit, or money. This will have the effect of coming into destructive competition with investment uicomes. People who have hitherto had incomes derived from the various kinds of investments, having already suffered heavy losses of income, aTe likely to be subjected to further losses. Very many of these people have passed the summer of their years and have no means whereby to re-establish their standards of life. They are being steadily reduced to pauperism. That is the great trouble. Most people are aware that the time is ripe for a change of system—or rather a change from catch-as-catch-can methods to systematized distribution. If our present Government can devise an understandable method of systemising distribution to higher standards of life for all, then it must do so without disturbing the comfort and peace of mind of the public by experimental preliminary processes. The Government must come forward with a tangible, understandable plan, otherwise it courts a loss of support that will put it out of office. P. B. FITZHERBERT.