N.Z. WAR LOAN

Grey River Argus, 13 May 1943, Page 6

N.Z. WAR LOAN

' COMMITTEE’S PERSONNEL ' ANNOUNCED.

WELLINGTON, May 12

The National War Loan Committee has been formed to deal with the next New Zealand Government war loan. The committee consists of the Acting-Governor of the. Reserve Bank (chairman), W. F. L. Ward; Secretary to Treasury: B. C. Ashwin; Chairman of the National Savings Committee: T. N. Smallwood; President of the Federation of Labour: A. McLagan; Under Secretary to the Prime Minister: J. Thorn M.p.; General Manager of the Bank<s of New Zealand: H. R. H. Chairman of the Associated BanljS®

P. R. M. Hanna; Director-Generals3 Post Office: J. G. Young; Presiderif| Associated Chambers of. .(Auckland): N. B. Spencer; Mayor of Masterton and Chairman of the Municipal Association; T. Jordan; Chairman of the Counties’ Association: W. Morrison: Chairman Life Offices’ Association: W. T. Ikin; Chairman of the Fire Accident Underwriters’ Association: FI. G. Wiley; Chairman of Newspaper Proprietors’ Association: C. W. Earle; Chairman of the Stock Exchange Association of New Zealand: A. Hamilton; Vice-President of the Associated Chambers of . Commerce: S. Patterson; President of th e New Zealand Farmers’ Union: W. W. Mulholland.

The Deputy-Governor of the Reserve Bank (Mr. Fussell) at the first meeting of the committee stressed the need for raising money from the public, not from credit expansion The success or failure of the loan would depend on the decision of the people, and the public were entitled to a plain frank explanation of the reasons. Their decision would be guided by their knowing the real truth about their country’s need of their help. “Thera is now much more than enough spendable money, in circulation to enable the people of this country to purchase goods and services becoming available from day to day. According to the bank’s calculations, the supply of Spendable money (not counting deposits in the Post Ofiice Savings Bank) increased from fiftyfour million at the outbreak of war to ovex - on e hundred and twenty million now,’’ Mr. Fussell said. “This was more than a hundred per cent, increase and it would be idle to suggest that the volume of civil goods and services in the country had also more than doubled. On the contrary, civil goods and services had been very heavily reduced.’’ “That is just what we all expect to happen in wartime, because so much of the country’s productive capacity and our imports too, have to a very great extent been switched over to another kind of goods services—not for civil consumption, or for enemy consumption. Doing this uses up a larg e share of our energies and thoughts, a large share of materials, and a large share of our spending power. To raise all the money from taxation income' would be unjust, because incomes alon e do not measure ability to help. Some people’s cash holdings are large in relation to their incomes. Loans from the public provide a means of tapping that voluntary source of available funds, which is not reached by income taxation. The taking of deliberate steps to make large artificial additions to the already teeming money supply would only harm the people of New Zealand. This money that is already in existence is competing strongly for the restricted supply of goods To issue new credit for war purposes, as a substitute for publicily subscribed war loans, would set the Price Stabilisation organisation' an impossible task. It would simply lead to reduced purchasing power of wages and of all family incomes, and cut down the real value of hard won savings. And if as has already happened, in some countries, the pressure of prices becomes too great, the dam bursts and an uncontrollable deluge follows.” Mr. Fussell added that if there were not enough money in circulation to do the job required of it there was a case ,for issuing more — but not otherwise. Inflation represents the result . of trying to get something for nothing on a large scale. “As the dangers of overflow money are known, it is intended to do all that is humanly possible to protect the people of New Zealand from itsi conseouences. If all support the loan according to their ability to do so. their contributions will in the aggregate carry the loan to victory, and at the same time help to build a rampart of stability against inflation.”