THE MORATORIUM.

New Zealand Herald, Volume LVIII, Issue 17914, 17 October 1921, Page 7

THE MORATORIUM.

SOME OF ITS DANGERS.

SENDING MONEY ABROAD.

NEED FOR EXPERT ADVICE.

(Contributed by the Welfare X*airn«.)

The recent discussions upon, and criticism of, the proposed moratorium legislation show that this country has arrived at a very critical financial position, which must be handled with boldness and wisdom if serious disaster is to be avoided. When first introduced in 1914, no doubt, this legislation was called for as a temporary expedient, but in 1916 this country was so flourishing financially that it, could and should have been repealed. The opportunity was missed, and a time arrived when it appeared not only dangerous to remove the restriction, but advisable to extend it, and now our financial position is such that still further extension is contemplated The position is not unlike that which arises when a man tells a lie, he finds he must tell many more to cover the first false step.

The serious aspect of the position is that all through this moratorium legislation is a tendency to endeavour to keep interest on capital at an artificially low rate. We know that capital naturally flows to the countries which offer the best interest for sound investment, we also know there is a great demand for money all the world over, and it appears to us that the Government, bv pursuing the policy of keeping down the rate of interest, is really causing the withdrawal of outside capital from this country to others offering better returns, at the very time when that money is most vitally required here—in other words this policy of restricting the normal rate of interest is causing the wry evils which the moratorium is designed to remedy. It would also appear that in order to avoid a comparatively small number of failures which might have followed the too late repeal of the moratorium in 1919, Parliament extended the system, trusting to an improvement in the financial world. This has not come, and now, instead of the possible evil of a few small failures we ( are threatened with the same danger on a much larger scale. There are manv able u and sound men asking seriously j whether we had better not face the posi- | tion now rather than eet deeper into the 1 mire by further tinkering with well- | established economic law. I One of the Welfare League's chief conI tentions was well expressed by our president. Mr. C. P. Skerrett, when the League was formed three years ago. j ' Y\ <? ana strongly of the opinion that j the Government hitherto has shown too great a dsinolination to take experts into J its confidence. Hitherto, as you know, • Governments have been 'arge'y the Gov- | ernments of amateurs. The war in Engj land baa altered that to a very large extent in the Old Country, but " to-day, in New Zealand, I venture to sav that the Government is a Government of amateurs, and that neither the Ministers nor the heads of departments possess the knowledge or experience necessary to eni able them to solve and determine some jof the tremendous problems with which jwe are assailed in consequence of the [ war. Has there been the slightest indicai tion on the part of those in power to I seek outside assistance in the determinaI tion of these important matters?" | We may bo doing the Government an | injustice, but we cannot help feeling that had it taken the advice of experts and of men unbiassed by personal considerations we shots'd not have been landed in the present difficulties with regard to the moratorium. In fact, we have an idea that some of the legislation was prompted by advisers who had sectional interests in view. However, we are "in the soup " now, and the causes which brought about such a position need not be discussed, the main consideration is to see what can be dine to get us out of the trouble in the best way for the j country as a whole. I There seems to be only one common- | sens* course to take, and that is for the Government to call in the assistance of the best brains in the country, men who have no or sectional axes to grind, and after deciding on a .sound line of policy to introduce the legislation necessary to he'p us back to normal.