INTEREST OR WAGES ?

Evening Post, Volume CXI, Issue 70, 24 March 1931, Page 5

INTEREST OR WAGES ?

(To the Editor.)

.Sir, —Arising out of your differential treatment of the wage-reducing proposals of Mr. Forbes and the interest reducing proposals of Mr. Lang, I inquired "what difference there was in principle between reducing the wages of Labour and reducing the. wages of Capital?" Your reply was to the effect that there was no difference. To quote your own words "a contract is a contract . . . and whether the subject be i Labour or Capital, it must be faithfully observed." You further ' stated that "wages as salaries that have been fixed for a definite term must stand until the end of the term." You contended, however, that the proposals of Mr. Forbes neither, violated nor recommended the violation of any obligation whether of; law or honour. In my reply to this, which you were good enough to publish m your issue of the 18th instant, I pointed .out that the proposals of ; Mr. Forbes did provide for the violation of contracts in. respect of wages. ' .Subsequent events proved my ..state-, m'ent in this connection to be 100 per cent., correct, for' as you are aware, proposals have now been introduced by the Prime: Minister, which,: if passed by Parliament, will have the effect of altering contracts relating to wages before the expiry of the, •term for which they were made. Your reply to this is that it is a misuse, of words to compare the revision of: awards and agreements by the. Judicial and expert body accustomed to deal with them to the violation of a contract by Parliament or by one of the parties. ■ Why this change of front Mr. Editor? Previously,- "wages and salaries which have'been fixed for a definite term, must stand until'the end of tlie term/ now. When Mr. Forbes : says that they must not stand until the end of the term,, you are in complete agreement with him. , ..; • With regard to the subject matter unr der discussion, I submit that there is no; 'difference in principle (and it is _ the principle that counts) between the violation of a contract relating to wages and the, violation of a contract; relating to rates, of interest, and therefore there ia no dif-: ierence in principle between the proposals of Mr. Forbes and the prpposalsr/of; Mr. Lang. • There is, however, a difference in the methods adopted. Mr. Lang proposes to do the violating direct by legislative enactment; Mr. Forbes proposes to hand the job to a "Judicial and expert body." Why not set up a Judicial and expert body to revise the interest rates on that portion of the National Debt that is. domiciled in New Zealand and also the interest rates of private mortgages in "the light of present economic conditions?" •■,• ■ I If interest rates are notreduced in the Same ratio as wages and' salaries, what becomes of the ■ much-vaunted cries of "equality, of ..sacrifice" and *aU should share the burden." " .• > . \~'i Mr. Downie Stewart pointed out in the House'that if the salaries of Civil servants were not reduced, and the cost of living fell, it would be equivalent to an in^ crease in the^ salaries of the Civil servants. The same applies to'interest; if the cost of living falls and rates of interest are not reduced it: will be equivalent to an increase in interest rates, and in consequence a privileged 'class will be considerably better off asa result of the worst economic crisis, that' this Dominion has experienced.—l am, etc.,. . : ,: >' A. PARLANE. V , 19th :March. , \ , i