MONEY DANGERS

Auckland Star, Volume LXXVI, Issue 200, 24 August 1945, Page 4

MONEY DANGERS

Mr. Lucas returns to this discussion, to quote his own words— "to disprove the fallacious contention that the trading banks create colossal sums at no cost to themselves." He supports his contention by the statement that "the trading banks have not increased their advances, etc." What are the facts? Mr. Chalmers, former chairman of the Associated Banks, recently made the following Press statement: "War expenditure was financed partly by taxation, partly by borrowing from savings, and partly by creation of bank credit. Credit was created by the trading banks to the extent of £18,750,000 in respect of Government Securities, together with an addi£l,7so,ooo in respect of advances." These are colossal sums, representing entirely new money originated by the private banking system, and being a clear addition to our total money supply. That Mr. Lucas should set himself up as a greater authority than Mr. Chalmers, and the various statistical records which substantiate these figures, is so ludicrous as not to warrant further comment. In any case, his avoidance of my challenge speaks for itself—my actual words were that the debate should be adjudicated upon by "a University professor versed in banking and monetary economics," not, as he alleges, by an advocate of Social Credit. This indicates that the approach of Mr. Lucas to this very important discussion is nothing more or less than sheer For this reason I do not propose to discuss the matter further with him, other than before a public audience under the' control of a chairman and an adjudicator appointed by mutual agreement WALTER S. OTTO.