CORRESPONDENCE

Evening Post, Volume CXX, Issue 110, 5 November 1935, Page 8

CORRESPONDENCE

EXCHANGE AND EQUITY

IS WEALTH INCREASED ?

(To the Editor.-)

Sir,—On Friday at Helensville th° Minister of Finance replied to critics of high exchange. As one of these I should like to comment briefly on a few of the statements made by him In claiming that "additional wealth has accrued to New Zealand as a result of raising exchange;" the Ministers says: "The farmer could buy more goods from the trader and manufacturer and the national income was thereby increased." Now, as I pointed out in last Tuesday's "Post," the farmers' additional income is derived solely from the consuming public of, New Zealand. Hence we have the following sequence of events:—(l) The public of New Zealand pays to the farmer £14,000,000 (Mr. Coates's own figure), so that (2) the farmer may buy more goods from the trader and manufacturer, resulting in (3) increased turnover in business. In the first place, were this transfer of purchasing power not to take place the result would be that the consuming public would be able to purchase for themselves, and enjoy the consumption of, the very goods that the farmer buys (according to. the' Minister) with this "bonus income."

Secondly, does the farmer spend all this bonus? The.wealthy farmer, the man who receives the greatest amount, has already ample purchasing power for all his needs and the bonus is simply added to capital—not spent in purchasing the necessaries of life. If _t is spent at all it is spent on luxuriesracehorses, motor-cars, trips abroad— or in acquiring property or personal estate. How much more equitable that this £14,000,000 of purchasing power should be left where it belongs with the result that business turnover would be greater—the wage-earner and middle class cannot affprd to hoard cither, money or "wealth." The difference would simply be one of distribution —increased sales of life's necessaries, greater enjoyment of life | by the consumer, the ability for him | to purchase five "measures" of goods with the same money as he now buys four.

The only wealth which accrues to New Zealand is the return she receives for her exports; and were 'exchange to be raised to 100 per cent. I maintain that still not one penny additional wealth would "accrue to New Zealand."

Referring to the plan (not a new plan by any means) that exchange should be paid only to the farmer in need, the Minister states: "Such a scheme would require an army of "prying inspectors." Surely he has riot forgotten the "prying inspectors" who visit the homes of the unemployed, who ask every conceivable question of relief workers and their wives so that they shall not receive one shilling more than they are entitled to. Has he forgotten the inspectors who visit workrooms" throughout New Zealand; the income tax inspectors who "pry" into the business man's books; the inspectors (Magistrates) who 'pry" into the affairs of applicants for various pensions so that they may not receive their few shillings per week unless absolutely entitled to do so. Surely, sir, he cannot have forgotten thes?. Yet should any suggestion be made as to "prying into the affairs of the farmer*' to see whether any gift from the community is merited —a gift in total, be it known, of £14,000,000 annually—why! this "prying" must be stopped before it is. begun!—l am, etc., K.G.