National Credit

Dominion, Volume 26, Issue 99, 20 January 1933, Page 11

National Credit

Sir, —In a short article under the. heading “National Credit,” in “The Dominion” of Saturday, the New Zealand Welfare League solemnly declared that “The slogan of mobilising our national credit is merely a meaningless catch-cry. No one has taken tbe control of the national credit from the public. It is still under the control and at the service of the people who own it.” , Surely the writer of that article does not expect the public to swallow that. A year ago—perhaps. Even more extraordinary statements than that were made and believed, but during the past fewmonths a. great deal of criticism has been made of the system of private control, of finance. The proposed Central Banking Bill has caused the man in the street furiously to think, and some of the questions he Is asking the champions of the banking system are very difficult to answer satisfactorily. A few of these questions I will ask the writer of the article mentioned, and I am sure that others besides myself will be interested in big replies. . . (1) Is it not a fact that the control of credit, whether ' individual, municipal, or national, is directly under the control of the banks? In other words, that the managers of the banks would be acting in the interest of their shareholders and not of the community? 1 (2) Is it not a fact that the banks lend more money than they actually possess, and that (to quote from an English author) it is considered sound banking policy not to issue above nine to ten times as much credit, as the bank holds in cash or credit at the Bank of England? (3) Do banks lend deposits, and if so,, what happens when the depositors ask for their money and it is on loan? (4) Is it not a fact that the great bulk of money in existence is an enormous superstructure of credit, based —not on the assets of the banks —but upon the real wealth of the community? (5) If this is so, are the banks morally entitled to charge interest on money which is merely a credit entry in a ledger? (6) Is it not a fact that the present problem is purely a money one, and that the private ownership of the “money ticket” system has hopelessly broken down under the very conditions which it was designed to bring about? (7) Has the writer any objection to a thorough and impartial investigation into the existing economic system, along the lines suggested by the N.Z.R.S.A., the Farmers’ Union, and other responsible bodies? Out of consideration for the writer I will refrain from asking any more questions, and I would stress the point that they are asked in no spirit of destructive criticism but of an earnest desire to expose the fatal flaw in a system that permits 70.000 families to exist in a state of actual want, in a land literally flowing with milk and honey.—l am. etc., N. V. TAYLOR, Hon. Secretary, Wellinglon Douglas Social Credit Association. Wellington. January 16