The General Election

Press, Volume XCVI, Issue 28434, 14 November 1957, Page 3

The General Election

Sir,- “Cheesemonger” asks “Why t does Mr Wilfrid Owen . . . claim . that Social Credit originated the basic principle’ that banks ‘create credit?” To go no further back the fact was plainly stated by Reginald McKenna," etc. That is "Cheesemonger's” mistake. We must go further back. The facts are: Douglas, of Social Credit, ; around 1920-23, caused considerable controversy by exposing the “money trick" or “swindle" when he stated, “Banks do not lend customers’ deposits, but create , credit by merely writing figures ] of finance in the banks’ books.’’ It was during this controversy ( which caused McKenna to make this statement, “I am afraid ordin- , ary citizens will not like to be told that the banks can. and do, , create and destroy money.” Since then McKenna never said another word on the subject. It was generally agreed by the banking fraternity that he had already “said a mouthful." —Yours, etc.. ALBERT E. WJLLYAMS. | [ November 13. 1957.

Sir, —The quotations in my| letter of November 11, reading, j “The statement that banks create] credit has been the occasion of]

much unnecesary controversy. It does not mean that any bank can create any amount of credit at its sole discretion without limit,” is from the fourteenth edition, Encyclopaedia Britannica, Volume 3, Page 48, under “Credit Limits.” Will your correspondent, J. F. Rasmussen, please give ref- ' erence and context to his quota- ’ tion to the contrary? If Mr Rasmussen’s contention is correct • why does the Government not remit all our taxation? It owns the Bank of New Zealand. My family lost money when there was a “run” on the Birkbeck . Bank (in London). It would not have "failed” had it been able to , create credit.—Yours, etc., REALIST. November 13, 1957.

Sir, —-Far too little has been heard regarding electoral reform giving ; the personnel of a democracy a • wider basis of choice and control over its representatives. Above ! all, the most important subject of foreign policy has received little airing, some politicians evi- . dently viewing it through their . fingers. It is probable that the . next three years will produce ; more international problems than ‘ the last, and it must be obvious • that attitudes and decisions should i be formulated by the whole I Parliament, not a political party . representative of only a portion • of the people. The whole concept , of security in its dimension of • regionalism is changing, and ■ policy can now be more creatively! ' responsive to the realities of geographic environment and wel- : fare prospects. The Common- 1 i wealth’s role through maturity by experience in two world wars should be an integrating one and it would be encouraging to see New Zealand’s name alongside India’s and Canada’s in the current disarmament debate.— Yours, etc., WHITE WATERS. November 13, 1957.