BANKS AND CREDIT.

Evening Star, Issue 22195, 25 November 1935, Page 18

BANKS AND CREDIT.

TO THE EDITOR. Sir, —“Accountant ” talks very glibly of inflation and economic laws, as if they were acts of G'od. Has it occurred to him that inflation and deflation are deliberately engineered policies carried out so that finance may profit by them at the expense of industry and agriculture? Has he noticed that even the immutable law of supply and demand is not behaving as the books say, because the controllers of money have so curtailed their commodity as to make the demand ineffective? Let “ Accountant ” think of the difference between “ actual demand ” and “ human demand,” and that costless money is all that stands between starving “human demand ” and its fulfilment. Does “ Accountant ” know that the inflation in Germany was deliberately brought about to enable that country to pay off_ her internal debts, which she did with depreciated currency? Does ho know that the closing of the New South Wales Savings Bank was caused by a “ run ” started by the trading banks in order to discredit the Labour Government? If “ Accountant ” knows his job he will realise that no industry generates sufficient purchasing power to buy the goods it produces; therefore goods are continually being created without equivalent purchasing power; this must inevitably deflate the currency in relation to goods. Labour intends that currency shall equate goods, which is neither inflation nor deflation. “ Accountant ” certainly has no right to his nom do plume if he imagines that a country mots its overseas obligations in currency. For his enlightenment lot me state that these obligations are met with goods bought with the currency of the country in which they are sold. If an English buyer intends giving 100 s per ewt for New Zealand butter ho certainly will not give more or less because we in New Zealand have altered

pur currency. When the Labour policy is in operation the exchange will naturally gravitate towards parity or better, so, _ instead of robbing tho people of their savings, Labour will restore the 3s lid which the present Government has filched from them.—l am, etc., Ken. W. Benn^t. November 23.