INTEREST-FREE LOANS

Press, Volume LXXX, Issue 24444, 19 December 1944, Page 3

INTEREST-FREE LOANS

Sumner Council's Discussion NO FURTHER ACTION TO BE TAKEN A proposal by Cr. W. B. Owen to forward a further letter to the Minister of Finance about the council s request for an interest-free loan for the housing of returned servicemen aroused lively discussion at the meeting of the Sumner Borough Council last evening. . , „ Cr. Owen said that the letter received from the Minister of Finance was not acceptable, and he moved that a letter along the lines of the draft submitted to the council be forwarded. The motion was seconded by Cr. F. L. Brandt, and when put to the vote was lost by four votes to three. The Mayor did not vote. . Speaking against the motion, Cr. Wm. Machin said that the matter was so serious that he felt that time should be taken to advance arguments against it. He felt that it was not right that the council should seem to be advocating monetary reform, and there was no alternative to discussing the matter fully. . “The point to stop the inflation is at the beginning,” said Cr. Machin, “and when the prices begin to rise it is time to be cautious.” The country had been warned two years ago by the Prime Minister that the lack of goods amounted to £40,000,000, and that there was an excess of £50,000,000 in money over the period since the beginning of the war, he said. Cr. Owen; Do you consider that will be the position in 10 years? Cr. Machin: I anticipate that if the Reserve Bank continues its issues we shall slide along the slippery slope until we are in a very difficult position. That is the way countries go bankrupt, sir. , Cr. Owen’s proposal was an attempt to encourage the Reserve Bank to issue money without solid backing, said Cr. Machin.

Cr. Machin concluded by referring to a report of the Stabilisation Committee, referring especially to a statement that “Currency inflation is the most cruel and least scientific method of making's levy on the people.” Currency Inflation “I hope that the council will not reply further,” said Cr. Machin. Cr. F. L. Brandt said he supported the motion because he felt that it was a move in the right direction to enable public bodies to obtain cheaper money for expansion. “No one denies that if the war goes on there will be plenty of money available for destruction,” said Cr. Brandt, “so why not money for post-war construction? That point has always puzzled me.” Cr. McCaskey said that Cr. Brandt -had “let the cat out of the bag.” Cr. Brkndt had said that the proposals were part of a move to go on all over New Zealand to obtain cheaper money. He added: “Cr. Owen is a member of a political party The Mayor: Order! Crs. Owen and Brandt: Let him go on.

The Minister of Finance had sent a courteous reply, and surely that was sufficient, said Cr. McCaskey. Cr. Gant said he thought there had been a lot of talk about nothing. “I am not interested in cheap money unless we all get it,” said Cr. Gant. Cr. Machin: We’ll get it in the neck! Cheap money would not cheapen houses, continued Cr. Gant. He thought that the Government ought to be urged to provide cheap houses for the soldiers. If the Sumner Borough Council let contracts fof the houses, who would make the profit? he asked. Cr. Brandt: Gant, builder. (Laughter.) “The Government can build them much more cheaply, and it should do so for soldiers at wholesale prices,” continued Cr. Gant.

Cr. Gant said he appreciated the sincerity of Cf. Owen’s endeavours, but did not feel that the council should concern itself with the matter. Cr. Owen maintained that the chief causes of inflatfbn were short supply of goods and increased taxation. Did Cr. Machin think that ordinary Reserve Bank loans were inflationary? he asked.

Cr. Machin: They are entirely different from your proposals. Cr. Owen: I merely want special concessions for returned soldier?. Cr. Machin: You can’t separate them. Cr. Owen: Yo» can separate to send them overseas. It was decided that no further action would be taken, voting being as follows:

For; Crs. W. B. Owen, F. L. Brandt, and C. C. Lamb. Against: Crs. William Machin, J. L. Gant, D. A. McCaskey, and W. J. Duff.

Cr. P. C. Fenwick asked permission not to record a vote.