NATIONAL FINANCE.

New Zealand Herald, Volume LVI, Issue 17267, 17 September 1919, Page 5

NATIONAL FINANCE.

I found Professor Segar's article ion " The Liberal Programme : Finance." .very informative, but it missed a point we would do well to consider. I refer to the issue of State notes to pay for State work, not as Australia now does on a proportion of gold reserve, but on a. well-defined piece of work, such as we borrow for cow. Gold can never be more than a fraction to any note, no matter how conservative the* issue of notes "may be. But development such as railways and roads is worth much more than gold to us. In the borrowing and necessary interest-paying, we are developing with the one hand and checking development with the other. Such works must be made to " pay "—that is, the settlers must be made to pay, whether their improvements have become productive or not. In a non-interest bearing -enture, essential articles for developmentsuch, as manures, wire, iron, etc.could be carried free, as lime is done now. So the productiveness of the be greatly augmented. All production needs to start it is credit, and if our credit is good enough for the outside it Is surely good enough for us. As to the checks on over-production of notes, the same check as now prevails in borrowing —the sanction of Parliament for each issue—is good enough. If -we all became I dazed, and went into a reckless and mad" note issue, our capital would be just the J same, our production would increase, our flocks and herds, etc., be no less, only the relative value of our notes decrease, cr, in other words, prices for goods increase. After all, lam inclined to think that big prices somehow are more pvoj ductive than low. It is hard to saw for one country, but compare us with China, say. and we gain by the comparison. Sam. A. Browne. Clevedon, September 13.