GOVERNMENT LOAN
Sir.—lf the new loan described in your leading article and by broadcast is to oe obtained, as you state it, “entirely from genuine savings,” and ‘real money—not created money,” as the broadcast described it, then the loan will be definitely anti-inflationary. But if, in spite of these most categorical statements, the trading banks are allowed to take up goodly portions by direct advances or indirectly by bank overdrafts through clients, then the phrases used are utterly misleading. Loans from the banking system are new created money, and therefore definitely inflationary, and must add to the total of money in existence. If bank advances are to be accepted, directly or indirectly, we not onlv have the previous inflationary trend, but will pay higher interest (3 per cent.), as against Reserve Bank loan money (at about 1 per cent.)—just unnecessary economic waste and a breach of promise.—Yours, etc., ANSWER WANTED. 30, 1950.
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Bibliographic details
Press, Volume LXXXVI, Issue 26126, 31 May 1950, Page 5
Word Count
152GOVERNMENT LOAN Press, Volume LXXXVI, Issue 26126, 31 May 1950, Page 5
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