OUR DUTY

Hauraki Plains Gazette, Volume 52, Issue 3282, 30 June 1943, Page 5

OUR DUTY

SUPPORT THE WAR LOAN APPEAL TO WAGE EARNER ADDRESS BY MR J. THORN, M.P. ‘‘The greatest obligation laid 'on us by the Budget is to make the £35,000,000 War Loan a success,” said Mr J. Thorn, M.P. for Thames in speaking in the House of Representatives last week. Mr Thorn continued: — “ I wish to make one or two observations on this loan, and give reasons why the masses of the people should subscribe to it in one way or another. Keep Prices Steady *‘ln the first place, it is part of a stabilisation policy which aims at preventing as far as possible rises in the prices of goods and services. In last year’s) Budget it was stated that the purchasing power in the hands, of our people was 100 millions more than the value of the goods available. The position must be very much the same to-day. .. “The situation, therefore, is one in which inflation may easily occur if this excess spending power is not turned away from the purchase of commodities. The loan is part of this necessary procedure. To the extent that it diverts purchasing power from certain goods to the war effort it will tend to keep prices steady, and so stop a fall in the- value of savings and incomes. For this reason particularly the workers, the wage' and salary earners, and those drawing Social (Security benefits, have a real interest ini the success of the loan, and as many of them as possible should invest in it. “I think a very special duty rests upon the workers to contribute a substantial proportion of the £35,000,000. Let them recall Hitler’s actions the moment he took power in Germany. He smashed the trades unions and their political parties, and imprisoned, exiled and shot their leaders, lie robbed the co-operative movement, and destroyed parliamentary democracy. If' he did these things in Germany he would do them here in New .Zealand. And what goes for Hitler gofes for Mussolini and Tojo. The loan is to help defeat Hitler, in which ;case one result will be to preserve the make deep social changes in the future. Stand By Your Mates “The workers should remember this too: That of the members of the Federation of Labour, to which most of their trades unions are affiliated, 45,000 at least are in the Armed Forces. The loan is to help in paying, clothing, feeding and equipping these men. It gives all trades unionists a chance of standing by their mates who are risking their lives.

“But another reason why the rank • .and file of the people must subscribe to the loan is that it is very doubtful whether, if. the Government were to decide to compel the well to-do and the rich to lend everything they possessed in the way of income after paying their taxes, there would be enough to yield anywhere near the £35,000,000. In fact, there certainly would not. Equalisation of Incomes “One thing we have done in New Zealand in recent years is to have moved considerably towards an equalisation of income, which means that the great bulk of the annual income of New Zealand is received by people who are not rich at all. Any inquiry into the statistics of income, whether for income tax purposes or for Social 'Security will show this to be the fact. “Take for instance the return of income made by individuals for Social Security purposes in 1939-40. These returns were made by persons of 16 years of age and over, and they numbered 901,271, of whom 224,000— mostly married women—had no income. The total of the income returned by the remainder was £137,708,000. Of this income £26,684,000 was received by those whose incomes were £6OO and more. They numbered altogether 24,115. Incomes Under £6OO “The remainder of the income—approximately £lll,ooo,ooo—was received by those whose incomes were less than £6OO, and of this sum £78,877,000 was received hy those between £2OO and £599. These numbered 260,611, and they received 56 per cent, of the total income returned by in- < dividuals. **lt is therefore clear that to the extent that it can be argued that the •loan come from current incomes, a considerable contribution ” must be made by the people with, incnmee between £2OO and £599 a year. •Some people are apprehensive lest fibe banka eome into the loan and so strengthen their power over the community. Well, I am a member of the War Loan Committee at the Reserve Rank and have met the bankers on ohhjs committee. , My definite impres-

sion is that they don’t wish to come into the loan if they can avoid it. Their argument is that if the banks advance money for war loan purposes this has no effect in reducing the holdings of their depositors. In fact, the deposits would remain the same after the advance as they were before. Would Be Inflation “A bank advance would be spent by the Government on commodities, and within the prices paid for these commodities is spending power in the form of profits and wages. This spending power would be in addition to the spending power already existing before the advance was made and it therefore would be an inflation. The bankers have argued that at a time when spending power is substantially in excess of the value of the goods available stabilisation makes necessary a reduction in spending power, and that to increase it would be perilnos to the people’s interest. “However, the people who don’t want the banks to come into the loan have a very effective answer; they themselves should subscribe the £85,600,000 and if they did this there would be no need for the banks to create any credits for the purpose of subscribing. “We have only to look at the total of their bank deposits and at the incomes they are at present earning to eee that the loan could be subscribed without inconvenience to anyone—specially if the contributors numbered 150,000, instead of the 26,000 who subscribed to the last Jfibcrty Loan.