The New Zealand Herald AUCKLAND, THURSDAY, NOVEMBER 18, 1944 WAR'S NEW TERROR

New Zealand Herald, Volume 81, Issue 25052, 16 November 1944, Page 4

The New Zealand Herald AUCKLAND, THURSDAY, NOVEMBER 18, 1944 WAR'S NEW TERROR

Germany's new flying bomb, the V2, is not a precision weapon. Unlike the gun, it cannot be aimed with the certainty of hitting a definite target vithin a given area, as, for example, Waterloo Bridge, Victoria Station, Woolwich Arsenal or the East India Docks of London. In its present stage of development it can be fired g.uerally in the direction of a large district like London, but whether it falls in the North Sea, Kent, Surrey or Essex, or drop., on the unsuspecting residents of the Old Kent Road, is a matter of chance beyond the influence of its firing crew. Yet when all of V 2's imperfections are acknowledged, it is absurd to deny, as has been done in some quarters, that it is an effective military weapon. Leaving aside any moral issues involved, any weapon which compels the diversion of a considerable portion of enemy effort is effective. The best of Britain's scientists are examining scraps of the bombs to ascertain their construction, how they are propelled and what explosive and how much of it they contain. The attention of the espionage and intelligence services has been turned to finding out where and how they are made and fired. The photographic reconnaissance units of the Royal Air Force are searching throughout the hours of daylight for the emplacements, and the photographic interpretation sections are burning the midnight oil as they scan every minute point of the pictures. Squadrons of the Bomber Command, with fighter escorts, are deluging likely firing points, and fighter squadrons are trying to shoot down the V 2's in the fleeting moment of their passing. Balloon squadrons are on duty continuously, and so are the anti-air-craft batteries and most of the A.R.P. services.

Were it not for the V2, nearly all of the personnel and equipment of these organisations would be devoted to carrying the war to Germany. Nor do they exhaust the tally of diverted effort. Behind them are the factories in which their equipment is made, repaired or replaced, and still further back are the mines, other factories and shipping, all of which have a part in producing the raw material of the equipment. Besides these items must be reckoned the conditions under which those who must stay in London are compelled to live because of the bomb. Their efficiency in the home and business is affected, for strain is ever upon them. By comparison, the costs to Germany are trifling. The propellant and explosive in the V2 are probably the products of skilled labour, but the bomb itself seems to be such that even semi-skilled labour under direction can make . si*- Transport and firing crews are likely to require less training than the crews of a heavy gun. Germany also saves the costs in men and equipment of bomber and fighter escort squadrons and their large grourd services. But candid admission of the effectiveness in the military sense of the V2 is not to be construed as acceptance that it will be a decisive weapon in that it will turn or materially influence the course of the war. The V2 cannot shut down all England, or even close many of its ports and factories. Therefore it cannot win the war for Germany. The most it can do is cause some dispersion of effort and thus postpone the inevitable day of reckoning. Throughout the ages scientists have endeavoured to produce weapons which by themselves would win wars or appear to be > terrible that wars would cease. Always, however, someone on the other side has evolved an effective counter-'weapon or the human mind has adjusted itself to the new terror. A fresh weapon used on a sufficient scale may confer temporary advantages, but if its intended victims have staying powev and equal resources in scientific knowledge and plant they will soon turn the tables. The gas warfare in the conflict of 1914-18 is an outstanding example. It is commonly believed that one reason why Germany has so far not used gas in this war is that she was given more of it than she could bear in 1917 and 1918. Hitler knows also that the Allies are ready for him the moment he uses gas. The tank and bomber aircraft and the Typhoon with its rocket guns are other examples of Britis'i resourcefulness in turning the tables. Britain is the world's great shining example of superb staying power and resource under stress. There can be full confidence, therefore, that V2 will be overcome.

MR NASH ON STATE BANK Mr Nash's views as expressed to the Labour Party conference on the proposal that the Government acquire the Bank of New Zealand repay study. Obviously tho Minister of Finance is not enthusiastic plout the project. He makes it clear that the?change of ownership would serve no real purpose. The functions a State trading bank would discharge, points out, are substantially,the same as those now being performed by the Bank of New Zealand as agent for the Government. Very sensibly he adds that there is no magic in the ownership of a bank; it cannot provide costless credit or what is called debt-free money. On the contrary—Mr Nash feels the point needs emphasis—it is production that matters. "That which is not produced cannot be distributed, however much money is made available. The acquisition of a bank is uj substitute for productive work." M. Nash is equally sound when he says it would be in the country's best interests that the bank purchase proposal should havi unanimous support, if that were possible. Or broad democratic grounds government by agreement is always desirable. In the case at issue, a bank's main asset is public confidence in its integrity, stability and soundness. If it forfeits its credit, it forfeits everything. How, then, docs Mr Nash hope to carry the public with him for a State bank"! Fron his subsequent remarks it can

be inferred that he expects the issue to be placed before the electors for a mandate. He pointed out that, while the party could not order the Government to act, it did frame party policy. The decision on that policy lay with the electors. Mr Nash's meaning seems to be that th„ bank purchase proposal will have to be approved as a plank in the party platform at a general election. Indeed, he appears to have seconded the proposal subject to that condition. Should it prove, however, that the Government intends to proceed with the project now, then it should consider carefully what is duo to the shareholders. A good precedent exists. When in 1936 the Government took over the Mortgage Corporation, it offered to repay the shareholders in either cash or stock, on terms designed, as Mr Nash put it at the time, to place shareholders in the same position as if th Government had not taken over the*- shares. That involves an obligation on the Government to furnish the bank shareholders with bonds.which will provide a rate of interest free of income and national and social security taxes and equal to the present rate of dividend.

THE NEW ZEALAND POUND In arguing that the New Zealand pound is under-valued, Mr Nash has tried to make his point by quoting food prices alone. Whether the farmers will overlook his clear demonstration that the prices of their staples have been held well below world parities is another matter. But "man doth not live by bread alone." In New Zealand's average household, according to the Official Year Book, food accounts for less than 30 per cent of total expenditure. Rent absorbs 22 per cent, fuel and light 6 per cent, clothing, drapery and footwear 13 per cent, train, tram and bus fares per cent, and so on. While food is cheaper in New Zealand than in the United States, Canada, Britain and Australia, most of these other items would probably be found dearer, and together they bear more heavily on the family budget than does food. Take rent as an example. Housing is probably _ dearer here than anywhere else in the world. Or think of fares, of ironmongery and crockery, of clothing or coal, of % the stock entertainments, radio and the pictures, of the price of labour services, or of motor-cars and petrol. If the New Zealand pound is undervalued for food, it is over-valued for most other necessities and satisfactions. In the total result its exchange value may n' depart far from real values. But what should citizens think of a financial policy that permits our main items of sale overseas to be under-valued while purchases are over-valued 1 ?