OUR READERS' OPINIONS

Gisborne Times, Volume LXXIII, Issue 12077, 17 October 1933, Page 3

OUR REA DERS' OPINIONS

THE BANKS- AND CREDIT

(To. Iho Editor..) ■ 'Sir, —When-times- are hard people try to find a scapegoat »nd a remedy. Tins -has Keen very well ex - ampler! in, New Zealand for somft months past—the .most abased scapegoat is ."The Banks.,’’ and tbo most favoured remedy “Social Credits. Those advocating some form of i n ‘ creased credit- seem to overlook the fact that the lack of credit i-s a symptom and not the cause of the trouble. CSo many persist in saying that •banks create-' credit -out ■of nothing, that the subject calls for careful examination. '. To begin with ;granting credit is another , form of -lending and borrowing. Tims every penny of the credit granted must he put up soon-op or later by somebody. Anyone, whether a banker or not, can create credit- by backing a P-N. lor a friend. If He bill is met on due date nothing happens but if. not then the backer must find the .money. In the same way a bank may create credit by an advance or overdraft, but if the advance fails it. must-pro-duce cash or close its. cloo's. This applies to. a. State -Bank as well as . a Trading 'Bank. When anyone gives credit lie has •to take a. risk;, therefore, before granting fit. care ,is taken to ho sure that he will get bis money back. The Erst essential of credit is confidence —credit automatically grows out of confidence. 'To talk of the hanks stealing end abusing the credit of the people is bunkum, for the- credits granted by tbo banks arc based upon their deposits, reserves and subscribed capital— together with the good repute op tbo borrower—and those resources have been voluntarily placed'in thet*' hands for the safe administration by their owners who are mostly small capitalists, and who wou’d withdraw them at once if they saw their savings jeopardised by umv'so advancesMoreover the banks are hedged round with legislation designed to protect denositors. shareholders, and the public and to ensure Proper conduct of their busine=s. The idea that- we could imnrove matters by working nn the “National m-edit” is often nut forward. Those who advocate this force); that we have alwavs worked on his- and have aK-eadv mortgaged >t up to the limit. The State has nothum else to work noon than the- national credit which oid,ides ihe arsets upon which the hanks al=n work. 1 At, the' hack c r «M dd- o’-nann-nwla to lie o riosire to devise seme scheme hv widch a rov-c-re-u+worthv nersen csii ohta’o c?.nd,t. Th-s -s of course no im'iOssihilit- unless ri'e V’lUn,- is prenarod to risk the advance. Tn any case the agitation has little nierifc because there is no shortage of credit in New Zealand io r creditworthy anpliermis.—A’onrs. etc., N.Z. WELFARE LEAGUE-

AIR. FOBBEP AND THE DOUGLAS

CREDIT PROPOSALS

(To the Ediior.j

Sir, —The- report in your issue of Fridagiving Air. t'orhes’ address on the AVorkl Conference, gives rise i° mixed feelings. Apparently Air. Forbes learns nothing and ,lorget s everything. Tn dealing with the Douglas Social Credit proposals, bo says that, when he mentioned these to different delegates, they smiled. No doubt, they did —at Mr. Forbes. For while that gentleman "'ns assuring himself thai; it was dead—in fact just about the moment ho was talking to these oracular friends —a huge meeting was being hold in the Queen’s Hall, London. Al] sorts of people met on a common platform, - A Labor -AI.P., sab with the Marquis of Tarristock, rows of notables, including 75 .M.’s P-, and they all voted as oneman on a resolution directed to break the- stra'nglo-liold which intcr-natinii.il finance has on the world. The resolution included (I). The restoration t° •the Grown an c ] People of the prerogative to issue all forms of money; (2) That there shall lie no return to the gold standard; (3) In order to •remove quickly the fear of want from our solves' and the .fear to act from our legislators, t'le Cabinet ylmlj take the necessary steps to ensure the basic needs of life to everyone, to alter tho financial system accordingly, and to make, provision for education for creative works, service and. leisure. And a report states that, the demand is growing like wildfire Li) - tlie creation of a new order, which will banish the nightmare of insecurity, fear and poverty. So much for Air. Forbes’ powers o 1 observation. His other propensities are of like order. When, for instance, he states that the, method, proposed by (lie • conference, wore adopted hv the nations present, he naively omits to mention except the United States. Perhaps, a-small thing like that eludes his memory as, apparently, also does tho fact that Sir Otto Niemeyor ordered a 'Central Bank when lie (Air. Forbes), states that it is absolutely ■wrong to say . that, the Central Bank was being formed at the instigation of tho Bank of England. And, again, when ho states (hat tho delegates agreed to cany on with methods that had stood the test of time, whereas the U.S.A. had decisively broken atwny from such methods, and the raison d’etre of tho conference was solely on account of the need for sound finance and the failure of tried methods tumbling about the delegates’ cars. No doubt Air. Forbes’ ears ar 0 insensitive to that kind of music. Fortunately for the world., the U.S.. delegate did not fall into the trap, as •did the others, and so many sighed with relief when it became- obvious' that the conference had failed. For it was a bank-inspired conference and, had it, succeeded, probably all nations would have been jq chafes o f gol c ] arid moved like pnpPets by some Central World Bank. What would it matter how nations, armed or disarmed or how high or low the .tariffs? AVo would ultimately have had a World State of servile nations and, therefore, of servile, individuals,, all in bondage to the Gigantic Financing Fovyer, .That, is obviously what the

hankers who pulled the strings were aiming at. The failure of the conference was the failure of money to impose utterly their terms upon mankind and. with that failure. the world may now he sot- on a happier road. Perhaps, President Roosevelt himself floes not realise what- a useful service- he has rendered the world through turning down the proposals. Now each nation has a chance i° ge[. control of its own finances, and sot- ils own house in order and. sorely five re is sufficient twain power to do that- when the issue is m>t to provide in an age of security, hut merely to make them harp" and 1 1 or from fear in an age of plenty. When that is on the way will h,. tin- line' fur another AYor Id < oii.ier<mce oon- • trolled • hy the free peoples and represented by others than a gang subservient to so-called ''’sound finance." I am. Yours oie., ’ A LEX. 11. St OTT. Tin; ganden ix Gladstone ROAR. ('To the Editor.) •Sir. —1. am probably not altogether on my own in deriving much pleasure fjoiit the knowledge that our Gladstone Road is gradually being turned from a dusty 'thoroughfare into an experimenter's paradise, but protest at. the slowness of the progress made. Certainly, much has been done—a. narrow ribbon of soil lias already replaced part; of the roadway, and tenders are being called for a ll edifice to partly block up the road at (£ito end —but much more could he done. For instance, a couple of monuments at: each end of the Gladstone Rond National Park would he infinitely hotter in blocking the approach of any motorist to the area to he sanctified shortly by Uie presence of trees’and pasture than placing only one monument in the middle of the road- at one end. To really keen up With the times and show what Gis borne can do when out to distinguish I let's elf from all other communities, 1 think that it would bo better to simply leave fourteen feet of road in the middle of the street and put the park (trees, gra-ss, an ( f a duck pon<i oil' two), along each side. Certainly this would popularise Childers Road and Palmerston Road immensely, and that is, of course, our aim in tearing ; up mtich of the- metal of Gladstone Road. The weakness of my new scheme ■is that once traffic takes to ■the other t-wo roads mentioned the thrill of dodging suddenly round a tree or monument into traffic would bo lost to users of Gladstone Road. I 'merely mention the above improvement to the present scheme, but oth•cr suitably ridiculous schemes can be evolved ns we proceed. T am, Yours, etc., * I. B. PRETTY.