HIGH EXCHANGE

Evening Post, Volume CXIII, Issue 32, 8 February 1932, Page 7

HIGH EXCHANGE

NO PERMANENT BENEFIT

REPLY TO DR. COPLAND

In the Masonic Hall, The Terrace, on Saturday evening Mr. E. W. Nieolaus, of the Citizens' National Movement, addressed an appreciative audience oa politico-economic matters. Mr. B. A. Gosse presided.

Mr. Nicolaus said that it might appear an impertinence on his part to reply to such an. eminent economist as Dr. Copland, but he (the speaker) was sure of his grounds. Dr. Copland, a product of the university, a man with degrees to his name, the adviser to Governments and financial institutions, merely used his knowledge to bolster up land securities and interest-bearing mortgages at the expense of the rest of the community, while he (the speaker) nsea his knowledge to follow truth, and the moral and economic laws, which, if allowed to operate, would bring about the permanent welfare of the people. Dr. Copland, as an economic expert paid by the people, should use his knowledge for their, benefit, boldly and fearlessly, irrespective of special interests. It should not be his concern to persuade citizens to follow a coursa which would operate to the sole benefit of mortgage-holding interests.' While Dr. Copland advised allowing the exchange rate to rise to its natural level, he did so with the express purpose of enabling the primary producer to meet his existing obligations, particularly interest on. mortgage, and ignored the elimination of the disturbing factors which have removed the exchange from par, namely, high land values and Government and local body borrowing. An unbalanced exchange operates against either the importer or the exporter, while the consumers as a whole bear the burden whichever way it goes, bearing in mind that exporters are consumers as. well as producers. Mr. Nicolaus pointed out, that the statement made by Dr. Copland that a high, exchange would benefit the farmers generally was not the whole truthT A high exchange would certainly benefit them insofar as they would, be able to pay a certain amount of interest on. mortgage, but it could not for many years allow them to farm at a profit. It would require a boom, period similar to the immediate postwar boom for the farmer to balance his budget. Most of them have lost their equity, or are about to lose it, and were merely working.for the mortgagee without any reward for their labour or return ou their capital, thus putting them on the same footing with the Irish, Scottish, Indian, Busßian, and Egyptian, farmers. Inflation, would do the farmer no good; de-rating would do him no good; subsidised labour would do him no good. All those benefits which are at present received by the farmer, and paid for by the rest' of the community, go but to make the mortgages more secure, and to raise the price of land, against the fanner and his sons; in. other words, all benefits are capitalised in land values. CAPITAL AS A BRAKE. Mr. Nicolaus said that so long as the law allowed private ownership of land-rent, so long would the owner or mortgagee be able to live upon the x farmer's produce, giving nothing and doing nothing in return for it, and pointed out that capital, invested "iv land does, not in any way assist production, but on the contrary acts as a brake upon it, and therefore the farmer will not continue to produce tinder those conditions much longer. If between the years 1913 and 1930 the Government had taken the' increase in the Talue of bare land, it would now be in the receipt of approximately £7,000,000 per annum : as the increase over that period had amounted to £126,000,000.and that sum. at 5J per cent, would give that return; not only wonld the Government have received that from land values taxation, which! tax does not bear upon production, but it could have rescinded Customs and, income taxes to an equivalent amounts Further, by taxing land values, it would have stopped all speculation in. land. Land values were' the product of the whole community, and rightly; belonged to the community, but wages, salaries, and interest on capital invested in productive works belonged to the individual, and the Government had no right and no necessity to take any of them for revenue. By taking the whole of the economic rent of land, the Government would have an income (ever increasing) of £17,000,000, which. would easily cover the necessary Government expenditure without having recourse to borrowing. All taxation could then be done away with; land would become cheaper, and wages and interest on capital would rise because the farmer would then be working at . a profit, and unemployment would have ceased to exist, whilst industrial securities would rise in value and become the best avenue for investing surplus capital. Bent being held solely by the Government, it could be raised or lowered and thus be kept at par with world parity prices. Land would be revalued, bringing it to its true economic worth, and New Zealand, by making a fresh start with a just social system, would leap ahead with, no woTry about what to do with our boys and girls or to provide work for worklesj men and women. EQTTAL OPPORTUNITY. Mr. Nicolaus concluded his address by asserting. that our attention should be focused on the just distribution, and . not the production, of wealth, which, could be safely left to the producer. He also stated that no one had the right to ask any person or Government to provide work or give him sustenance, but all had the right to demand the equal opportunity to work profitably, which demand wonld be made in the near future. Equal opportunity could only be given to all. by freeing the land from mortgages and monopoly, and on. the Government's head rested the consequences of not acceding to that demand.

Many questions were answered, and the meeting closed with a, vote olj thanks carried by acclamation.