The Grey River Argus FRIDAY, APRIL 2O, 1945. USE OF NATIONAL CREDIT.

Grey River Argus, 20 April 1945, Page 4

The Grey River Argus FRIDAY, APRIL 2O, 1945. USE OF NATIONAL CREDIT.

So long as it is for war, which returns no interest, use without limit of the national credit is endorsed by critics of the Government, but they demur at its use on a far smaller scale for social and economic development. Of this fact, the ex-Governor of the Reserve Bank, Mr Lefeaux, has again given an illustration. He urges that institution to clamp down against the financing of housing, saying the reserve powers should, instead, be used later to meet a depression. No doubt, the idea of finance capitalists is that the State should leave to them the control of credit in peace time, when they can afford it without limit for those to -whom they choose to allow it. It is certainly not upon credit that the country lives, but upon real wealth. Mr Lefeaux contrasts the £250,000,000. in purchasing power possessed by the people with available goods and services, but it is nonsense to suggest that even a quarter or an eighth of this is going to be splashed upon goods or services just when they cost most. The Reserve Bank has, excellent 'collateral in the form of State houses for such credit as it has afforded for them —and the people have the houses. Over in Australia they are crying out at the lack of the houses! Other critics are saying that if the Government takes over the private interest in the Bank of New Zealand, . it will make over £B,OOOOOO available for investment and that this will be an embarrassment. Perhaps the Government might ease the minds of the holders by pointing out where they should invest it for the national advantage. In Australia this idea is being seriously advocated. The Government, while it has had to, find unprecedented sums for war, has by its civil expenditure enlarged enormously the wealth-producing capacity of the country, and raised the living,, and health standard of the people above the level of other countries. AVe do not want the slump psychology to be raised again as a-ghost to paralyse the energy and initiative of the people, but Air Lefeaux hearkens back to that spectre by pretending that finance capital is the foundation of prosperity, rather than the reality of wealth itself. He feels constrained, however,'in this implication to talk

of oversea, rather than internal, credit, whereas our oversea credit is to-day as solid as over it was in our history. No doubt he would say five hundred million of credit for war is the acme of wisdom, whereas half that amount for other purposes is risky! The fact remains that private controllers of credit are ready at any time to deflate and depress the community for private ends, and ready also to make fish of some people and flesh of others. They themselves do not finance their operations out of income, but on an expectation that national production ultimately will not only equate, but will exceed advances. The Government is* safe in doing likewise. Mr Lefeaux suggests indeed that after the war private capitalists might disinvest, and might seek radical taxation cuts, but that is not to say that the Government cannot readjust the situation in due course so as to do away with any such necessity. The position is sound, and except for propaganda in favour of private finance capitalists, there is nothing to indicate that it will not so remain.