INFLATION EVIL

New Zealand Herald, Volume 82, Issue 25180, 18 April 1945, Page 3

INFLATION EVIL

DOMINION'S POLICY SURVEY BY MR LEFEAUX "If any redistribution of incomes in the community is to be attempted, let it be done in an honest and straightforward way by such means as taxation," eaid Mr L. Lefeaux in the course of a recent address to the Palmerston North Chamber of Commerce on the monetary policy of the Dominion. Mr Lefeaux was former governor of the Reserve Bank of New Zealand and previously assistant to the governor of the Bank of England. "People can then see what is happening and make their arrangements accordingly, while money itself retains a more or less constant value," said Mr Lefeaux. "Inflation, on the other hand, is simply deception. People may for a time think they are receiving more than they were, but they wake up eventually to find that the reverse is the case. They may appear to be richer in money, but they are not so in terms of goods. We should get it clearly fixed in our minds that a country cannot consume more than it produces, or its' equivalent, except to the extent that it can either draw on savings or else mortgage its future production by borrowing abroad. No amount of monetary manipulation can upset that axiom.

Dominion's Good Fortune "As regards the present financial position of the country it needs no words of mine to prove how extremely fortunately New Zealand has been treated in this war," he said. "Not only has the value of her exports risen by about one-third compared with Britain's decrease of 50 per cent, but also it has been possible to pay off many millions of pre-war sterling debt, compared with Britain's sacrifice of well over £1,000,000,000 of overseas assets in the common cause. In New Zealand, payment for the main exports has been received in advance instead of after sales, and there is no aftermath of destruction of property to be dealt with. "In addition, overseas funds have risen to the record figure of £57,000,000, in spite of what appears to be an adverse balance of some £50,000.000 during the past two years. There must, of course, be some explanation for this apparent discrepancy, but I am afraid we are left to guess what it is. With a watertight economy surrounded by controls and restrictions, appearances may be very deceptive. Specially is this so when vast quantities of supplies are being received without payment under lend-lease and similar arrangements.

Paying from two Pockets "One thing we do know is that the real value of the New Zealand pound had decreased considerably before the war. We are also painfully aware that, in spite of an avowed policy of stabilisation, frequent efforts have been made by various interests to have their incomes adjusted to meet the increased cost of living. But as most such adjustments lend directly or indirectly to increased costs, the process tends to go on indefinitely so long as inflation of the currency continues.

"Subsidies all tend to disguise the malady. All they really achieve is to make the people as a whole pay for things out of two pockets instead of one. It seems to me that, in normal circumstances, any financial .policies which necessitate restrictive and corrective measures condemn themselves. Surely it ia better to alter an unwise diet than to rely on drugs to counteract its bad effects. "However, I think we should be careful to be absolutely fair in considering all these things to which I have referred. We should endeavour to distinguish between things which are entirely due to the war and those which can be brought under our own control. We cat) then see how best to deal with any self-inflicted evils as distinct from problems created by the war alone." GALVANISED IRON REGULATIONS JUSTIFIED "Present stocks oi galvanised iron are less than tiiey have been at any time during the war period, and if the control of the material was revoked, stocks would disappear overnight," said the Building Controller, Mr G. W. Albertson, yesterday, when commenting on a report of proceedings in a recent action in the Magistrate's Court, Auckland, when two builders were fined for building breaches connected with roofing iron and spouting. "The reason lor any control is the shortage of a particular commodity, and it there were no shortages, there would be no control," said Mr Albertson. "Normally, New Zealand uses 21,000 tons of galvanised iron a year? hut since the Japanese entered the war, the amount available has been only about 10 to 15 per cent of this amount each year. Any statement which indicates accumulation or improvement in the stock position is contrary to fact. It was therefore necessary to limit the purposes ftir which galvanised iron may be used.

" If any builder has stocks of galvanised iron, whether under his house, or on top of the house, there are plenty of legitimate purposes for which it may be used, without resorting to illegitimate purposes. If stocks failed altogether, then the person requiring a few sheets to patch an old roof to eke out the position until stocks again become available could easily be faced with the total renewal of a roof, which otherwise might still have a considerable life. The emergency regulations provide for penalties up to £2OOO, so that neither the introduction nor administration of a control notice is considered lightly." FRANKTON STOCK VALUES STRONG TONE IN MARKET (0.C.) HAMILTON, Tuesday A full yarding of fat wethers was penned at Frankton today. Competition was keen from the outset and prices showed an advance of approximately Is (3d a head. A full penning of fat lambs sold at recent quotations, while a small offering of ewes sold readily at very firm rates. Ox beef was penned in smaller numbers The quality was better than of late and with a firm demand values showed a marked - improvement. Cow and heifer beet was in short supply, and here the rise in values was inoro marked, amounting to at least £ 1 a head. The veal pens were well filled and all sold freely, with higher values at the latter part of the sale. Pigs were yarded in good average numbers, baconers and porkers selling fully up to last week's quotations. Choppers were in keen demand. Bidding for a large entry of store and Weaner pigs was not as keen as at other sales, prices easing slightly. Heavy prime wethers made 30s to 87s; prime, 34s to 355; light prime, 31s fid to 335; prime black-faced two-tooth, 29s to 325; light black-faced two-tooth, 2fls to 28s; heavy fat ewes, 22s to 23s 3d; medium, 20s to 21s; light, lfl« to 18s; unfinished, 12s to 15s; extra heavy fat lambs, 30s to 32s (id; prime, Ids to 18s; medium fat, 23s to 255; light fat, 20s to 225; unfinished, 17s to lf)s. Heavy prime bullocks. £lO to £l7 ss; medium, £ls to £ls 15s; lighter, £ 1 I to £l4 17s; heavy prime heifers, £l3 to £'l3 10s; medium, £ll 15s to £l2 10s; light, £11; heavy flit cows, £ll to £l2 7s; medium, £lO 5s to £lO 15s; lighter. £0 5s to £10; runners, £7 to CI I 10s; venters. C 3 to £0 ss; light vcalers, 30s to £2 10s. Heavy choppers, £5 to £8 sb; others, £2 to £4 10s; heavy baconers, £5 to £5 Os; medium, £1 10s to £4 Ifis; light, £4 to £4 8s; heavy porkers, £3 5s to £3 15s; medium, £2 10s to £3; light, 38s to £2 ss; store pigs, 24s Gd to 32s Od; slips, 14s (3d to 21s (3d; weaners, 4s to 12s 6d. PRODI/CTION ENDANGERED TO.C.) MORRINSVILLE, Tuesday The Morrinsvlllo sub-ward of the Dairy Producers' Association has decided to protest to the Minister, of National Service, Mr McLagan, against the drain of milkers due to a comb-ont of farmers for the Army. Mr Roy Vickers, of Mangateparu, said that approximately 300 qualified milkers were involved in the Waikato and it was clear that production would' drop because replacements were not available