THE BANKING SYSTEM.

Evening Star, Issue 20972, 10 December 1931, Page 1

THE BANKING SYSTEM.

TO THB XDITOK. Sir, —You don’t seem to appreciate letters showing a tendency to reform the present currency and banking institutions. This present system that lias been evolved through the ages requires evidently further evolving to bring it up to date with the great advance of this engineering age; Under the present system you have in the United States of America and Great Britain 627 multi-millionaires, and between the two countries 8,000,000 unemployed are poverty stricken. Even in New Zealand, in a land of plenty, there arc 50,000 unemployed workers out of a total population of 1,250,000, which includes children, on the unemployed list. This* list includes engineers, chemists, builders, carpenters, bricklayers, plasterers; in fact, every trade is represented, and all because there is insufficient money to initiate works which are required. The natural wants of these people, if supplied, would give work and produce the natural wealth, hut we are supplying these wants noth somebody clse’s loft-olf clothing, old boots, etc., and therefore keeping the people unemployed. Ever since New Zealand became a colony we have been borrowing money from the Old Land, and paying interest on the same. In borrowing from the Old Land wo had to have assets. What were they? Was it not the people and the wealth they could produce, etc.? The consequence of this continual borrowing has been that we have been payin'" lately £15,000,000 a year interest. In’ another ten years wo shall have made the owners of the capital amount £150,000.000 richer in money, and we shall still owe the original amount. If those responsible for the borrowing had established a State Bank and mint and manufactured our own money we would still have our country behind our money, and we would have had'no interest to pay. Our imports could then be regulated by a board set up for the purpose, so that they would at least balance the exports, and therefore balance our Budget. What is wanted all over the world is not deflation oi inflation, but circulation. —1 am, etc., Pbocbess New Zealand. December 9. TO TUB SDITOK. Sir—On reading “Advance, New Zealand’s ’’ letter about election results I experienced an emotion of the utmost protestation against the rather senseless and absurd arguments which lie puts forward. 1 am inclined to I thi"k that -‘Advance, New Zealand

is most decidedly “Sink, New Zealand.” It was by means of the same pretentious policy that the Labour Party won the confidence of the people of Australia. The Labour Party intended to improve Australia’s financial condition: it certainly did this by issuing more paper money than it could possibly hope to honour. A State bank was established which took all the people’s savings to pay Australia s debts. It was announced the other day in the paper that the third suicide was committed by a man relieved by the Government of a tidy; sum, which represented his life’s savings. I was infinitely relieved to find that the Coalition Government was returned to power at the General Election. Had Labour been successful New Zealand would most certainly have followed in Australia’s stops. All banks would be shut, and those who had _ deposits would thus be robbed of their subsistence. , I ask “Advance, New Zealand (?) what earthly use a new system of currency is going to be to New Zealand. "What is wrong with the present currency? It would do the world of good to let the Labour Party into power and allow the public to see what a mess it would make in the same way as the Labour Government did in Australia. The only objection to this is the cost of rectifying the blunders that Labour would make. If the Labour Party got into power, everything would be “ State.’ There would be State banks, warehouses, theatres, motor cars, etc. Every family would have a motor car with free petrol. That is Labour’s policy. I have reason to believe that Mr Holland would use the people’s own money out of the bank’s to supply the “ free ” petrol. What an easy way out of onr financial embarrassment! Perhaps_ “Advance, New Zealand ” will think before he proposes such brainy suggestions again. It is selLevident that he is a one-eyed Labourite, who, if he did find himself in power, would get stage fright and not know what to do. Hoping I have made the position a little more evident to “ Advance, New Zealand.” —I am, etc., RJ-G. December 9. TO T*« JKHTOK. Sir, —After perusing your columns last night I happened across “ Advance New Zealand's ” rather brilliant solution of this country’s financial difficulties. Simple in the extreme! He proposes, as I admit others have proposed, to establish a State bank, inflate the currency, and generally improve social conditions. His letter altogether smacks of childlike belief in the bocial-ist-Labour doctrine. If iris propoundings were taken up by Parliament I for one would be overwhelmed with joy to have the obnoxious smells issuing from the Anderson’s Bay foreshore removed. As far as his choice of nom de plume is concerned, one far more apt might he “ Follow Australia.” Mr Lang established a State bank in New South Wales, with disastrous results. The fruits'”of the--people’s years ,of scratching and saving were appropriated by the Government. Australia s currency was inflated, with what results? Could “Advance New Zealand ” tell me what good State-every-thing would do ? If he has listened to the Socialists and Communists, with the usual mentality and common sense so characteristic of that great brotherhood of workers, ho will no doubt be full or "lowing phrases and flowery promises of even distribution of wealth, everyone of equal social standing, and what not. No matter how this principle is introduced or tried there will always be the same largo number who will, because of their initiative, foresight, common sense, and upbringing, remain one { step or more above the common ruck. Advance New Zealand ” must remember that “ the ways of mice and men gang aft agley.”—l am, etc., Scbipsis. December 9.