Social Credit policy

Press, 25 September 1980, Page 16

Social Credit policy

Sir, — I doubt if Social Credit would carry a 3 per cent loan policy to the foolish limits suggested by J. F. Garvey (September 23).. Three per cent Reserve Bank loans which can be fully recovered plus interest seem a lot better than massive subsidies in the form of belowcost electricity to aluminium smelters which are a direct and continuing charge on the New Zealand taxpayer* Comalco and the new smelter already enjoy this advantage over our freezing works and woollen mills. The only difficulty in using Reserve Bank credit is that multinationals would be reluctant to accept lbw interest loans .in place of subsidies. A large percentage of the present subsidies are probably paid by the multi-nat-ionals to their own banks in the form of what J. F. Garvey would call “normal interest.”- Yours, etc., JIM TIMINGS. September 23, 1980.

Sir, — M. T. Moore (September 23) is tilting at windmills. An unauthorised booklet’s unwitting quote of the box number of a League of Rights front constitutes even less of a “surface link” between Social Credit and the League of Rights, than Labour’s link with communism through known Socialist Action League infiltration. Thirty-six years of holding office in ‘Alberta beats any Labour record and is six more than India’s Congress Government’s 30 years. J. F. Garvey uses glib phrases. His “Social Credit bureaucracy” already exists. The Reserve Bank, as a revived “Monetary and Economic Council” — with teeth — will become an independent public- watchdog with the powers and curbs over trad-, ing bank operations to manage actively the financial economy into equilibrium and attract private investments into financing productive ’ assets again through the P. 0.5.8 and trustee savings banks. Japan’s and West Germany’s “economic miracles” rest just on this sort of provision of low interest credit for private industry and careful promotion of financial equilibrium. — Yours, etc G. A. GLOVER. September 23, 1980. Sir, — Mr Garvey (September 23). dismisses Norman Davey’s suggestion of 3 per cent • loans for investment. Surely it is better to have cheap money for business than allow trading banks to charge 15 per cent on loans. Trading bank credit is the nation’s main credit source and that supply should ebb and flow according to requirements. A-.sag-ging economy needs stimulating through loans and an over-buoyant economy needs calming bv reduction of credit. Trading banks work in reverse. They increase credit in a buoyant economy to boost profits, and. withdraw credit in a depressed economy to lessen risk. This indicates a basic flaw in our money source. The solution would be to withdraw , the credit creating privilege of trading banks, or let them operate credit supply on the country’s behalf for a fixed charge at no risk to themselves. I believe Social Cred-, it is correct on this point — Yours, etc., J. SHARPSeptember 23, 1980.