GOVERNMENT'S WAY

Evening Post, Volume CXXVI, Issue 78, 29 September 1938, Page 8

GOVERNMENT'S WAY

MONEY FOR FARMERS

PAYMENT EY OVERDRAFT

The fallacy that persists in some people's minds that the nation cannot utilise its own credit for the backing of currency without taking money away from somebody was illustrated by a question put to the Minister of Finance, (the Hon. W. Nash) at his meeting at Eketahuna last week, reports the "Standard." The Minister had mentioned that it was possible that there might be a deficit of £1,000,000 in the Dairy Industry Account at the end of the current season as a result of the higher guaranteed price. "Where is the Minister to get that £1,000,000 from?" asked the questioner. "That shouldn't worry the dairy farmer," replied Mr. Nash, "for he's the one that's getting it." A voice: You'll have to take it off the sheep farmer. Mr. Nash: No. It isn't taken away from anybody. It is merely an overdraft at the Reserve Bank, and there is likely to be an overdraft.for a good many years. "But surely, Mr. Nash, you must admit that there is no such thing as something for nothing," interjected the original questioner. "It's not something for nothing," replied Mr. Nash. "The dairy farmer does a lot of hard work and produces a lot of essential goods, and we pay him for that. The overdraft simply represents extra currency in circulation in New Zealand."