£12,000,000 LOAN FOR HOUSING

Press, Volume XC, Issue 27374, 12 June 1954, Page 2

£12,000,000 LOAN FOR HOUSING

VIEW OF SOCIAL CREDIT LEAGUE STATEMENT BY PRESIDENT Both the Prime Minister (Mr Holland) and the Leader of the Opposition (Mr Nash) had carefully avoided the main issue in their latest exchange on the £12,000,000 housing loan to the Government from the private banks, said the leader of the New Zealand Social Credit Political league (Mr Wilfrid B. Owen) yesterday. . “Mr Holland says. ‘We raised the money in precisely the same way ordinary customers of the banks would raise overdrafts’,” said Mr Owen. “The point is that the Government is very different from an ‘ordinary customer.’ Mr Holland seems to forget that the Government represents and is the people, and the people own their own bank: they are the shareholders of the Reserve Bank. What would the shareholders of a commercial or financial concern say if their directors diverted business away from their company and gave it to a competitor? This is exactly what the directors of 2,000,000 people have done, and the people will pay the cost. “I cannot fathom why Mr Holland thinks it is dangerous to use the people’s credit (or the social credit) created by the Reserve Bank, but not dangerous to use the social credit created by the private banks,” Mr Owen said. “The only difference is in the shareholding of the banks, and in each case the money really belongs to the people. “Both Mr Holland and Mr Nash use the phrase, ‘turning the handle of the printing press,’” said Mr Owen. “The only money that is ‘printed’ is bank notes, and the amount ‘printed’ depends solely on the demand from the public for this type of currency and is used in the main only as ‘small change.’ The bulk of money in existence (over 90 per cent.) consists of bank credit, and is represented by figures in the accounts of the banks’ customers and is not backed by notes or coin. It is used and circulated by means of writing cheques, which merely transfer it from one account to another. The £12,000,000 in question was created by the banks merely writing the amount to the credit of the Government. The money came out of the ink pot, and will cost the taxpayers £420,000 per annum, a large proportion of wnich will go overseas. The £420,000 will not come out of the ink pot but from the incomes of the people, and they will pay it year in and year out**'