Insulating New Zealand

Dominion, Volume 31, Issue 242, 9 July 1938, Page 13

Insulating New Zealand

Sir, —J ] ia ve to thank you for your indulgence in publishing my letter in full, and I hesitate to impose on your generosity further, but would be grateful if you would allow me a few hues to reply to Mr. J. E. Horsfield, who has completely missed my point. He says that in order to be self-contained we would require to close down a very great percentage of our primary industries. His figures are no doubt correct, but I can't visualise a slump so intense that we would sell nothing abroad. The theories propounded in my letter were not intended to cope with such a contingency, but rather to cope with the slump aa it develops. Just think of what would be the position if by some catastrophe all the rest of the world were to sink beneath the sea I Accordingly, if those who believe that insulation is impossible are right, we would have a slump of the first magnitude. There would be no money. In a land of infinite resources we would all be poverty-struck. Nothing could be further from the truth. This would be a time of unprecedented activity, making good the shortage of imports. Unemployment would be a complete absurdity. Before we got into our stride, however, it would be necessary to estimate in advance the value of possible production and provide money to balance, or the goods could neither be produced nor sold. The function of the Reserve Bank would be to apportion this money or credit. _ So long as equivalent goods came into being, the only limit of this special creation of money would be when all reasonable wants were satisfied, or when people wanted more leisure. 1 There would be a number of commodities we would have to do without, but there would be no shortage of good shelter and clothing, and most other things required. No war comes to a close for lack of money, neither should necessary production, for now we know that money is bits of paper and book entries. —I am, etc., A.J.P. Pahiatua, July (5.

Sir, —While reading the letter by your correspondent “A.J.F." it appeared to me that he missed or ignored a fact that would probably render his scheme unworkable, that is the enormous difference in even the present quantity of our primary production in proportion to our consuming power, which renders us more susceptible to overseas conditions than probably any other country. Under his scheme we jvould have to be Gargantuans. or most of our farmers would be out of a job. and most of our land a jungle, also probably all our port towns like Auckland and Wellington would be ruined. Without a population of from six to ten millions the next best thing for us is the people overseas who consume our products and send us goods in return. What a chance the Government has missed (for that matter the last Government missed the same chance). Our overseas credits should have been used in the slump times to import goods from Britain, making it possible for her to buy that value in goods from us. When trade and prices are good overseas funds should be increased to use in slump times to act as a governor. But at present we are using up everything and probably paving the wav for a huge man-made slump. Most of us agree that the forty-hour week is good for the individual, if not for machinery, but wages in the main should have been kept about the same as when this Government came in and the cost of living kept down, so the working man could have the same standard of living as now, and there would be many more people in work, and our manufacturers would have been able to compete with overseas goods without raising tariffs and heavy taxes.

As regards consuming power, when reading the account of the evidence given before, the National Health and Superannuation Commission, as reported in “The Standard,” I was astonished at the statements made by a member of the Labour Federation and two members. I wonder if the old saying, "A little knowledge is a dangerous thing,” applies in this case.—l am, etc.,

MAN IN THE STREET. Carterton, June 6.