THE POOLING OF CREDITS

Otago Daily Times, Issue 21529, 29 December 1931, Page 8

THE POOLING OF CREDITS

TO THE EDITOR. Sir, —The latest scheme of this Government of ours is that all money obtained by the sale of exports from this country must be placed in a pool and the Government and local bodies are to have first claim on that money to pay interest, etc., on their extravagant borrowings. No Government of pure Socialistic colour could impose more drastic interference with the individual trader. Let us look further and see what this means. Exports will probably bring £40,000,000, which, because of the rate of exchange, means that the banks -must pay the New Zealand exporters £44,000,000. Now, consider what the preferential claims of the Government and local bodies mean. Freight payments equal £3,250,000, interest on Government and local body debts £8,500,000, refunding loans £7,250,000; — total, £19,000,000. Very good; these are to be paid first; £49,000,000 minus £19,000,000 leaves £21,000,000. This means that after the sale of our exports and the payment of these debts the banks are left with £21,000,000, yet, as we have seen above, it is necessary for them' to pay to the New Zealand exporters £44,000,000. There is only one way that the banks can make £21,000,000 into £44,000,00, and that is to print paper moneV to the value of £23,000,000 —and that in one year! Mr Downie Stewart is now racing along the slippery and dangerous road of inflation which leads to financial chaos. The motto of the Government might well be, “ Empty cupboards through empty heads.” —I am, etc., Out Hanging Lang.