NOTE-ISSUE QUESTIONS

Evening Post, Volume CXVI, Issue 71, 21 September 1933, Page 6

NOTE-ISSUE QUESTIONS

(To the Editor.) , N ' Sir,—lncorporated in the Central Reserve Bank Bill is the proposal . for a State Treasury , note-issue, through the Central Bank, to replace the - private banks' own note-issue and takeover the gold held by the bauks. In the first place the trading banks have about £5,000,000 notes in circulation, on v which,'l'think,' they pay 4 per cent, note tax. Are the trading banks going to continue to pay this tax'for the use of the Central Reserve Bank's treasury notes, ■or are! they, going to ibe relieved o£ this taxation altogether, 'perhaps at the expense 'of the wage tax? Again, it appears to me a stupid arrangement to spend' Treasury notes buying gold which has keeirlying. in Ihe strongrooms of the banks for nineteen years, unused and unwanted, whereas" the export farmers in this Dominion are on their beam-ends.for the want o£-a fair return for their year's work. The proper thing to do is to utilise the Central Reserve Bank's note-issue in subsidising the export farmers' prices up to a level that would give them replacement credit ior next year's production. -We. have had the experience of what a subsidy will do in the" building trade. In 1014-18 the English Treasury no"te subsidised munition work iii England, and that work was gi^en away without any charge at all to the recipients. In these matters the Minister of Lands, in a" reported, speech at the Lyttelton byelection, said the Government had procured the Advice of three of the most able economists in the country. Would it not ue more fitting to use Charles Dickens's" expression and refer to them as the "most remarkable men in the country"? It is listening to the advice of these economists and not using plain common sense that has broitght about these contract-bieakins tactics th.it { -ue so repnlsive to the true Butish bom, ana has induced the Government to place the 25 pet cent, exchange tax on imports,, the ot which, phns such an important p,ut in maintaining the pnce-le\el of our exports oveiseas and supplies the J(ew Zealand currency that pa>s the export 'tanner for his pioduce. With a direct subsidy to the expoit taimcis, instead ot the high exchange, the impoiteis would have evety chance ot cieating a demand in England ior out produce. The restriction would be lemoned horn the sale ot ButiMi goods, which meatib work and. .pending power in England to buy our' "oods The issue of a Ticasury note subsidy to the faimeis would bung- ,every commercial home in the Dominion back to normal trading. They Iwe thegpods on their shelves, but what ib lacking-is the medium, of exchange among V our people. With a fanners' TieasuiT note subsidy the fresh ciedit issued would enter into competition with existing ciedit and probably reduce inteiest chaiges when, the present conti acts expire, w Inch is tUe^ pioper time to make any alteration. You have, in jour leading columns, many times, condemned the high exchange and interference with contracts, but you must remembei that it was the Press ot New Zealand that put the CoaliLion combination in power. The colossal blunder the Press mado, and which I tried to point out at the time, w as that they chose a high ioiehead from one party and- a squaie jaw horn the other and expected lesults. The Press will yet have to-learn that both these qualifications must be on one and the same person to expect statesmanlike leadei^hip —I am,' etc., G. n. WILKIX.