COST OF LIVING

Press, Volume LXXXVI, Issue 26121, 25 May 1950, Page 2

COST OF LIVING

Sir, —Those who make all the noise about removal of subsidies, should give some thought to cause and effect. Many will remember the phrase used by a prominent Labour leader years ago, “The sky is the limit; spend your way to prosperity.” Subsequent inflation of the currency reduced the purchasing power of the pound by over two-thirds. The Labour Government decided to dope the people by subsidies, and it looks as though the dope has been effective. It was an evil day on which the politician was given a free hand to monkey with the currency. It must have been a glorious event in the lives of certain politicians when they found themselves in control of such a wealthy little country, and resolved forthwith to get busy with the printing press, and leave the aftermath to posterity. What a mess confronts the National Government!—Yours, etc., COMMON SENSE. May 24. 1950. Sir.—Some years ago I heard a couple of old fellows talking Government finance. One old fellow said. ‘Suppose you borrow £ 10,000,000 from overseas at 5 per cent. In 20 years you’ll have paid £10.000,000 in interest, and still owe £10,000,000. But if you print £10,000.000, and withdraw 5 per. cent, from circulation every year, in 20 years you’ll have paid back £10,000.000, and don’t owe a cent.” “But. of course,” he said, "that won’t meet with the approval of the bankers.” I understand that in Australia a railway was built with “funny money” of that description. Can you confirm this, please? And if it can be done successfully in one country, why not in another?—Yours, etc., RAGLAN. May 24, 1950. [‘‘Nationalist,” “Darkest Before Dawn” and “Jet Propelled” may briefly reply: otherwise, this correspondence is closed.—Ed., “The Press. ’]