GAP BETWEEN PRODUCTION AND PURCHASING POWER.

King Country Chronicle, Volume XXVIII, Issue 4633, 8 December 1934, Page 5

GAP BETWEEN PRODUCTION AND PURCHASING POWER.

(To the Editor)

Sir,—l should like to compliment you on your leader of December 4, and if Great Britain can produce a satisfactory method of closing the gap, I feel assured that social creditors all over the Empire will welcome her success as the attainment of their objective. Although this gap between consumption and production is now generally admitted, Major Douglas received nothing but ridicule from the orthodox economist when he pointed out, fourteen years ago, this flaw in fhe monetary system and its inevitable consequences. May I draw your attention to the fact that money (credit) is created by the banking system for the production of goods, but unfortunately is cancelled by the same system before those goods have reached the consumers, so leaving the goods unpurchaseable, a state of poverty amidst plenty that you refer to so pointedly in your leader. Major Douglas pointed out that sufficient credit must be left in the community as purchasing power, to enable the people to buy the goods produced. The actual method of so doing, he said, should be left to comply with the conditions of individual countries, though he gave an example for an imaginary balanced community merely as a basis to work on.—l am, etc., J. S. MASON, Hon. Sec., Waitomo District Council.