FINANCING OF GUARANTEED PRICES.

King Country Chronicle, Volume XXX, Issue 4811, 20 February 1936, Page 4

FINANCING OF GUARANTEED PRICES.

With but a formal statement of the farmers’ case released for publication to guide the general public, it is impossible to determine how the requests of the Farmers’ Union were met by the Government on Saturday last. The Prime Minister said afterwards that the meeting’ was a friendly one without conflict of opinion, but that does not alter the fact that at the meeting what must constitute one of the knottiest problems the Government has to consider was under discussion—guaranteed prices for farm produce. The guarantor

for those prices must be the public of New Zealand, and there appear to be two schools of thought as to how they can guarantee them—by taxation or through the “national credit.” Perhaps borrowing will supply the solution, but the Labour party at the hustings was emphatic New Zealand had borrowed enough —and in the long run borrowing means ever-increasing taxation. The party also said that taxation in New Zealand was too high but made promises, born perhaps of election fever, of what was going to be done with the “national credit” of New Ze e ;- land. In view of opportunities for promising having given way to the necessity of practising it is anticipated and hoped that the Government is moderate in its actions or if not moderate, successful. With the example of Alberta before it, moderation in its monetary policy would seem to be the best course —success does not appear to lie in that direction, nor Utopia within grasp of our hands. It is true the monetary system is in the course of evolution, but even if there should happen to be a colouring of truth in the advanced theories, one fact stands out. The value of money is based on confidence, and any sudden and dramatic departure from proved methods is likely to destroy that confidence, especially in view of the fact that the misuse of the national credit has failed so utterly in Alberta. It is to be hoped that the Government in helping the farmer and putting the remainder of their initial policy into operation—vital amendments to the industrial laws, a 40-hour week on public works, restoration of wage cuts, and railways construction —keep New Zealand’s credit intact. The items mentioned above, along with the all important Finance Bill, are the leading subjects for consideration at the session of Parliament which will probably open next month. No wonder Mr. Savage has promised, the public will have no complaint about dullness in politics! But the public first want security, and is anxiously awaiting the detailed Statement of the Government’s monetary policy which Mr. Savage last week stated would not be available until the Bill is introduced very early in the first session of the new Parliament. The Finance Bill comes first and the other five major Bills follow, so that it is probable they hinge on the monetary policy.