ISSUE OF CREDIT

New Zealand Herald, Volume LXXV, Issue 23044, 23 May 1938, Page 11

ISSUE OF CREDIT

TRADE FALL OFFSET LABOUR'S PLANS CRITICISED DIFFICULTIES EMPHASISED [by telegraph—OWN correspondent] MARTON, Saturday "While the Minister of Finance directs attention elsewhere Mr. Ormond ilson pursues the franker course of meeting challenges concerning the insulating of New Zealand from the next depression," said Mr. H. C. Jenkins, in speaking at Kakatahi this afternoon. Mr. \\ ilson recently stated that in a depression credits would be issued by the Reserve Bank, which would keep wages and prices at their present levels, said Mr. Jenkins. "To whom would credits be issued? 1 " lie asked. "Business firms not making profits would not want them, and farmers unable to make ends meet would only require enough to meet the outgoings. They would employ no more labour than they could possibly help. Public Works Expenditure

Under those conditions the only user ot the credit issued by the Reserve Bank would be the Public Works Department. Here, then, would be a country not paying its way engaging in a large-scale programme. This would be equivalent to a man going downhill financially and furnishing his home luxuriously. He would have assets for the money spent, but unless the income could support the home he would soon be bankrupt, and the buying of furniture would hasten bankruptcy. "Mr. Wilson is also a realist enough to admit that in the event of a longcontinued depression, or permanent fall in the price of butter, the exchange might easily go to £150," continued Mr. Jenkins. "That means the value of all money would again depreciate, and every fixed debt or longterm contract, such as a mortgage or life insurance policy, or deposits in the Savings Bank, would be cornmensurately reduced in purchasing power. Position 0f,40-Hour Week "Wages, too, could not be raised by the equivalent amount of the fall. Mr. Wilson admits also that in any attempt to insulate New Zealand the 40-hour week would probably go by the board in a depression, because its duration cannot he foreseen. "1 was told in Sydney that the last Labour Government in New South Wales provided unemployed single men with rations. That was 7s 9d a week. A man in one of our workers' camps received keep and 10s a week, a total of at least 2os a week. Which was the better friend of the worker?" asked Mr. Jenkins.