MR POLSON’S ADDRESS.

Otago Daily Times, Issue 20781, 29 July 1929, Page 7

MR POLSON’S ADDRESS.

. TO TUB EDITOR, Sir, —The address of the president of the Farmers’ Union, is well worth reading. As he speaks as a farmer, and is strongly supported by the fanning ’■ community, Mr Poison’s utterances are truly representative of the views of tlio • only section in New Zealand whose labour produces commodities that can be exchanged with wealth from abroad. It is this fact that gives prominence and strength to the farmers’ claim for consideration.' Millions of pounds! worth n E wealth is annually brought into New Z_ea- „ land for which it would be utterly :iraposible to pay, except by the skilful labour of the primary producer- It is one of the most extraordinary positions that confronts ns that the very people who are the most industries and productive, and until quite recently have -been most prosperous, are, we find, now ' clamant to a' degree unheard Of before v for relief from oppressive conditions which threaten their very livelihood. One might almost be tempted to ask Mr Pol- . son is he “ trying to fling the giasks in folks’ een,” as the Scotch say. were it not that abundant evidence is visible to confirm his arguments. Paradoxically, it is the abundance of argument advanced that prevents a clear vision from being outlined. To explain the trouble that afflicts the. farmer, in valnes, it is necessary to. have an understanding of the foreign exchanges. - which are inextricably interwoven with finance, and form a subject completely outside the understanding of most farmers, as well as of all others who are not experts. Never the-' less, it is quite obvious to all that finance and control with the grip of a vyce are involved. Mr Poison did not enter ( into this aspect of the' which, from an economist’s point of view, is the starting point of the inquiry. The produce that is exported forms the tangible foundation upon which prices are formulated abroad, and thia amount expressed in money represents the amount of wealth which in turn must be purchased from abroad, as no money actually ” passes in exchange'. It is this fact that explains the balance of trade, at present amounting to some £12,000,000, which the Minister of Railways calls “frozen capital ” stored in London, . But this statement is far from conveying a complete explanation, and it is dangerous to draw deductions from it. The actual

position is quite different. In the first instance, all farmers’ produce that is exported and sold abroad is paid for on delivery, and a remittance is at once forwarded to New Zealand, and payment u promptly made to. the exporter, which proves beyond all dispute that the £12.000,000 has long ago arrived here, and has partly gone into circulation, and party lies at call in the local banka. How, then, it will at once bq, asked, can the £12,000,000 be lying “ frozen ” in London when it has already been paid' out here? This is a position that arises from the skilful manipulation of the financiers, or, more correctly, the bankers, who control all finance, and are enabled by using other people’s money to manipulate, wizard-like, on a basis of credit an amount of money which, without having a real existence, can be at two different places at once. That this is eo can be seen, first from the fact that every exporter in New Zealand has long ago received his payment, and secondly, from the statement of Sir George Elliot, chairman of the Bank of New Zealand, who only a few weeks ago stated that their bank had a_ large amount of funds invested in British Treasury bills and other short-dated investments in London, and that the increase in rate has benefited them materially* This power to manipulate other people’s money has, however, its limitations, and when’ the limit Is reached.unoney becomes “tight,” and the effect reacts upon the producers, who become the victims of the financial manipu* lation which is neither seen nor understood by the public. It is here that tbs Party politicians shine by "flinging the glaiks in folira een,” for he designates local causes as responsible, when the actual cause is produced 7 by financial manipulation that takes place outside of Zc&lund* But although everything points to financial manipulation as the source of the trouble, a controlling influence on financiers will have no effect unless prices are determined by a more stable system than that exerted by supply and demand.—-I am, etc., , W. SmRT6EN.