SHEEPFARMERS' COSTS

Press, Volume LXXV, Issue 22662, 17 March 1939, Page 4

SHEEPFARMERS' COSTS

TO TUB EDITOR OF TB.I PR**» Sir,—Mr Sage asks the following; "When a sum of, say, £SOO ‘debt free’ money is advanced to a farmer he will naturally use it for wages, interest, manure, etc., and the sum will be distributed through the general pool. Each recipient of a part of the £spo passes it on again. At what stage in its progress is it to be ‘cancelled out’ and how are those holding it when cancelled going to be compensated for the labour, manure, interest, etc., they have parted with to obtain it?” A pretty hefty question and carrying the entail to “put aside present beliefs and maintain a judicial attitude of mind.” In the first place—and doing my best to maintain that “judicial attitude” and avoid side-stepping, I am afraid I could not possibly agree that an advance of £5 or £SOO of “debt free” money in any such circumstances is practicable, nor would it be desirable if it were. When I simply do suggest (leaving out such side issues as efficiency, marginal land, saturation point, etc.) is that where a farmer has produced and sold, say, a bale of wool for £lO, he has already distributed £ls in “labour, manure, interest, etc.” to produce, he then receives £5 from the community (as the consumer) through the Reserve Bank to recoup him for that balance unrecovered that the consumer has got. Actually, on net balance over the transaction —will Mr Sage please note? —the farmer receives exactly nothing —for the body of value in the debtfree (or as it really is “debt-freeing”) money remains with the consumer who first received this value in the form of a reduced price in getting the wool 33 per cent, under cost and so carries it with the wool into consumption. As far as cancellation goes—the financial credit used in producing the £ls bale originated out of nothing and automatically returns to nothing or is “cancelled out” when its cycle of operations—production to consumption —is complete but cannot be completed while this hiatus exists over £5 worth of financial credit used to reflect that £5 worth of real credit. An accumulation of such hiatuses produces disorder that eventually leads to the breakdown of the whole system and this threat in the sheepfarming industry is plainly on the horizon now, and yet so easily remediable. The rest of Mr Sage’s letter, however interesting, is mainly a matter of difference of opinion on whether a shortage of purchasing power really exists or not. His reference to social credit, to which I take no exception, may have less point if I say social credit is neither a creed nor a method nor a system, nor is it a plan—it is just a philosophy to which a certain mechanism is merely incidental by way of producing the results necessary to give effect to that philosophy. The soft impeachment by implication that I subscribe to social credit ideas can therefore really have little influence on what I maintain is purely a matter of reason and the barest justice with common sense. To deny it is merely to assist the inevitable hand of dictatorship, already showing its ugly head, to rise up and govern a people unable to govern themselves; and it will then be not difficult to persuade ourselves that we may easily be what the.late Mr Dion Boucicault in “Aren’t We All?” once said we all were.—Yours, etc., Y. T. SHAND. March 15, 1939.