INTERNAL LOAN PROPOSAL.

Press, Volume LXIX, Issue 20880, 13 June 1933, Page 7

INTERNAL LOAN PROPOSAL.

TO THIS EDITOR OF THE PRESS

Sir, —The following sentences appeared in the joint statement issued by President Roosevelt and Mr Ramsay Mac Donald .on April 26:—"Enterprise must be stimulated, by creating conditions favourable to business recovery. Government can contribute by the development of appropriate programmes of capital expenditure." This message issued - seven weeks before- the conference opening to-day gave the world at large an indication of the steps likely to be advocated and adopted by two of the largest nations of the world. In view of the above message the general principle of an internal loan as ■ suggested in Auckland would certainly seem to come within the measures advocated from Washington and likely to be adopted during the nfext few weeks in London. The details of the Auckland scheme may be subject to certain criticism, but the Aucklanders certainly seem in good company on the broader principles. In a scheme of capital expenditure by New Zealand it is possible that a certain portion of the expenditure may have to go overseas for certain materials and thus not benefit this country directly, but there will be a certain indirect benefit if such materials are secured from countries who are customers for New Zealand produce. „ If any good is to- be obtained by steps of this nature, now is the time they should be adopted, the steps to be taken would provide work and not relief. To wait till things right themselves and then start to borrow does not seem common sense. It will not help the 70,000 who want work on a better basis. When times are better, there should .be no need to raise loans to provide work and capital expenditure by governments, and any action taken then would only tend to . bring the Government into competition with private enterprise, which should in good times be able to absorb the greater proportion of our unemployed. The message also calls upon the central banks by concerted action to do their share in the stimulus of business recovery by providing for the expansion ,of credit and seeing that such credit gets into circulation. We have no central bank here, but no doubt the associated banks are doing their nart in this direction.—Yours, etc., STIMULUS. June 12, 1933.