FINANCING STATE HOUSES

Gisborne Herald, Volume LXXII, Issue 21853, 25 October 1945, Page 4

FINANCING STATE HOUSES

Sir, Mr. N. Hilliard’s defence of the present method of financing State Dousing rests, I suggest, on iwo fallacies. In .the first place, he says that the alternative is to raise loans in England. Actually no one has ever raised a loan in England for housing, and I cannot believe that this course has ever been suggested. The real alternative, surely, is ior people to acquire houses out of their own savings, in just the same way as they acquire any other capital goods. Secondly, Mr. Hilliard says tha.t the rent .from the State houses goes to pay off the loan from the Reserve Bank and the debt is wiped off. Both the Reserve Bank and State Housing Department accounts show that, far from .the debt being wiped off, it is continually increasing. If the debt has not been wiped off, or even reduced, then it follows that more money has been put into circulation. Without commenting on this aspect might I quote a paragraph in Dr. Hugh Dalton’s Budget speech which appeared in last night’s Herald. ‘‘We must be prepared to hold back purchasing power until there are enough goods to buy,” he said. ‘‘The danger now is lest too much money should run after too few goods.” Nearly three years ago our own Prime Minister warned us that New Zealand was suffering from too much money and too few goods, and he estimated the deficiency of goods—or the surplus of money—at £IOO,OOO. It seems to me that any increase in the money supply without.an equivalent increase in the quantity of consumer goods available must aggravate this position. H. H. BARKER.