"UNPRECEDENTED PROSPERITY"

Press, Volume LXXIV, Issue 22307, 22 January 1938, Page 18

"UNPRECEDENTED PROSPERITY"

TO THE EDITOR OF THE I'RBSa. Sir,—Mr Savage declares that this country is enjoying unprecedented prosperity, a statement with which "The Press" and also the president of the Farmers' Union also agree. The latter also claims that this prosperity is due to increased returns from exports. Last year's returns exceeded all previous- records by about £7,000,000. This being so. is it not rather curious that so many farmers are by the aid of Relief Courts defaulting in payment of debts they contracted to pay? Persons who have their savings invested in mortgages are not sharing in this "unprecedented prosperity."—Yours, etc., MORTGAGEE. January 21, 1938.

TO THE EDITOR OF THK I'KESS. Sir,—ln your issue of even date, you publish a communication from the Prime Minister, in which he claims that under Labour administration New Zealand has reached "the highest level of prosperity it has ever experienced." If, after examination, this claim is found to be true, then the claim is something to be proud of; but, if, after

investigation, the claim is proved untrue, then it becomes matter for something more than regret. There is no difficulty in showing that the facts Mr Savage produces in support of his claim are only half the troth

Jte'lells ns "some of these increases are": I. Value of production 40 per cent, increase. 2. Factory production

a new record by more than J; 15.0(10.000. ;{. Factory employment, an increase of" 21 per cent, in two years. 4. Total wages bill of New Zealand -an increase of 40 per cent. T>. Note circulation —an increase of 41 per cent. This looks an imposing array, but on examination it is found that Nos. 2, 3, ■l. and f> are included in No. 1. that is to say. the last four items are merely phases of activities that go lo build up the 40 per cent, increase in ' reduction.

Now, without, wishing to doubt Cor a moment the accuracy of this 40 per cent, increase, it remains a fact that the Prime Minister has only told us half the truth. The omission is the fact that this increase has been accomplished at. Hie cost of some £20.000.(100 of debt (plus interest). Such a small item that it is not expedient for Mr .Savage lo mention if. The Prime Minister knows, as we all do. that a country cannot, borrow itself info prosperity.' Me would have us believe thai an individual borrowing, say, -UIOOO. on his assets and with which If, for a while, loads a prosperous (?) life, is in fact really better off than he was before he commenced this operation. The plain fact is he is enjoying a false prosperity and his "depression" will come when he i.s called upon to repay th'' XIOOO (plus interest). In exactly (he same way, N"W Zealand is at the moment enjoying this stale of false prosperity, i.e., a prosperity based on debt. The enjoyment is at"the expense of many millions of borrowed money. This, with ils interest, has to be repaid and (he people meantime are living in a fool's paradise. The depressed feeling will come when the mortgagee asks for his money. Mr Savage, by telling us half the truth, would have us believe this fools paradise was permanent and real. No individual, arid no country, can <;et out of debt (i.e.. become truly prosperous) by getting deeper into debt. Borrowed money has attached to it certain costs and the two items are. in total, greater than the sum borrowed. So any prosperity based on debt (Mr Savage's kind) must be less in financial value (ban its financial cost. One enjoys the small pseudo prosperity now and enjoys (V) (he big Savage depression after. Unless Mr Savage alters his policy (not his objectives) on Ihc one hand, and on the other ceases to try to camouflage the action of his Government with platitudes and half-truths, he will be unable to regain that large amount of confidence which iie and his partv have lost, since last election. It would be a crime if the 40 years of struggle, which the Labour Party has suffered, were to be negatived by its leaders. So I predict that unless the Labour Government alters its policy. Nemesis awaits just round th_c corner. -Yours, etc.,

NATIONAL CREDIT Jsnunry !!0, 1938.

■pi tiik F.i.'ri'.m of Tin: fhf.ss. Sir,-Your contention that must of New Zealand's prosperity is due more to the high prices boinf? received for our produce than to any action on Li I<part of the Labour Government is probably correct; but undoubtedly the Government h.is by its laws caused that prosperity to be more widespread, putting more money 'into the pockets of those most, needing it. To say that this has brought about a boom seems to me to be sheer rubbish. That there is no boom is proved by the quietness of investment; booms are always heralded by frenzied gambling on the stock exchange. So long as investment keeps reasonably dull, all will be well with the people of New Zealand. —Yours, etc., QUITE CONTENT. Waimate, January 21, 1938.