International Economics

Dominion, Volume 24, Issue 144, 14 March 1931, Page 9

International Economics

Sir. —Mr. Holland, in his statement delivered at Westport, is reported to have said that Mr. Forbes's statement amounts to surrender to Reform,' Mr. Holland might have gone further. However, in order to comprehend the position of international economics a little better, I will take the liberty of giving one illustration! During the war it became obvious to Mr. Lloyd George that the gold reserves of Great Britain were inadequate to meet the emergency of war. The whole of the energy of the. nation had to be stirred to intense activity to resist the enemy. The British Parliament conscripted the best of British manhood for active service, but failed, for some reason or other, to conscript the remainder of the population to provide the sinews of war, and carry on. As the gold reserves were hopelessly inadequate to meet the requirements of the situation, the Government first arranged huge loans through the Bank of England, those loans bearing interest. Mr. Lloyd George, however, soon realised that he could escape, at least, the interest charge, and so further currency was raised by special .issues of Treasury notes, called “Bradbury's.” It must be remembered that the Treasury note is an emblem of Sovereignty. It is an 1.0. U. issued by the State. It is a promise, through the official head of the State, by the people, to honour the 1.0. U. In other words, it is a mortgage of the future, and men have to work to redeem these uotes. Now, owing to the failure of Parliament to conscript those remaining at home, and leaving them free to indulge in economic activity, this enormous inflation resulted in easy money, and in the emergence of a class now called profiteers. These gentlemen were enabled to reap a rich’ harvest of these Treasury notes, these mortgages of the future. With commendable foresight, from their point of view, they looked round for security and investment. .The security, mark yon, that was being fought for on the battlefields of France. These wise gentlemen realised that perhaps the most promising of the manhood that were engaged in the war were the Anzaes. Not only were they.au immensely potent factor in proportion to A their numbers, but also there existed behind .them immensely fertile lands, capable of rapid development. So these gentlemen in England, who should have been conscripted. invested their unearned gains in overseas securities! After the war was over, to wit, commencing in the year 1920, the Conservative Parliament of Great Britain deliberately deflated currency by leaps and bounds, instead of by a gradual process. The latter process would have enabled a gradual adjustment. to the new conditions. . This hasty deflation resulted in an immediate aftermath of unemployment in Great Britain. This had its repercussion by causing the sudden and heavy fall in tlie prices of New Zealand produce. In other words, the'security fought for.and more or less gained by the Anzacs, is now being used against them. We have Io pay two pounds of butter, for every one we contemplated having to pay, to bolster tip crystallised inflation. Mr. Holland might have gone further. He might have said that Mr. Forbes's Statement is a complete surrender to British capitalism. • ’ There arc. however, if not in New Zealand, statesmen in Australia, and it 's to be noted that both Mr. Lang and Mr. Theodore recognised something of the true position, and in their statements have indicated that they are not prepared to surrender unconditionally to the state of affairs brought about entirely by manipulation of British currency. Instead of the public Press of New Zealand adversely criticising the Australian statesmen they should bo giving to Australia the wholehearted support that is due from one. branch of Anzac to the other. We are. no doubt. Imperialists but we should realise that Imperialism begins at homo. In view of the above, is it so immoral that we should ask that interest on our wnr bonds in England should bo reduced pro rata wtft.li Ibe decrease in the price of our produce? Wo were not party to either the original inflation in England or to the deflation which has since been manipulated. Why should Australia and New Zealand ho ehnrmin" , -blnek.s for the mnnfinnlntors of British fi-mn-m? Why should the loss in Now Zealand bo visited upon that, section of the community least able to bear it. namely, the wage earners? There is neither statesmanship nor justice In Mr. Forbes's nolicy. ami it is statesmanship and justice that is narticalnrly needed in New Zealand at the present time. And the people of Now Zealand are going to see that they ret it. I hold no brief for Mr. TM’.”id. hut I am' prepared to give Ivm credit where credit is duo. Nevertheless, the people of Now Zeahind are not satisfied with flic management of their affairs. . Consequently, a new party is in process of formation. A party which. It Is hoped, will give full •mression to the hopes nnd aspirations ®f the People of this country.—T nm. etc., P. B. FITZTTERBERT. WeHington, February 16.