Credit Restraint

Press, Volume CX, Issue 32322, 13 June 1970, Page 10

Credit Restraint

Sir,—There is nothing wrong with New Zealand’s economy. It is the faulty money and banking system we have that strangles our way of life. As for Mr R. O. Smillie saying that banks do not create credit, let me say very emphatically that that is not correct. Banks definitely do create credit.— Yours, etc., S. H. SMITH. June 11, 1970.

Sir, —If Social Creditors have done nothing else they have at least drawn aside the curtain of secrecy surrounding the money machine and given the ordinary man in the street a glimpse of its workings. There is nothing wrong with reasonable interest. Social Creditors rightly protest against interest on money at the places of manufacture. Whenever new money is created it should be spent into circulation and not lent; that is the difference between social credit and social debt. The so-called national income was in fact created at its source as an interest-bear-ing national overdraft and a second national debt.—Yours, etc., A. GREIG. June 11, 1970.

Sir,—Mr W. B. Bray’s point that hidden reserves are permitted in banking accounts is not well taken. He still cannot see their content if they are hidden, and was wrong to write “interest Which usually ends up as hidden reserves.” It is unhealthy advice to try for abnormal sensory powers so that bank directors may be suspected of conspiracy to fool all the people all the time. My point is, who is Mr Bray fooling? Interviewed last November, he told your reporter he had written hundreds of letters to “The Press,” and that his views must have been right, because these letters had seldom been contested. Such reasoning indicates how very often one is being fooled by oneself.—Yours, etc., A. B. CEDARIAN. June 12, 1970.