PURCHASING POWER

Otago Daily Times, Issue 22205, 7 March 1934, Page 9

PURCHASING POWER

TO THE EDITOR. 1 Sra,— -Extensively in use in connection with plans for the restoration of prosperity we find the word " confidence. It is not everybody that uses it in the same sense in which a certain section use? it for the special purpose of inducing others to embark upon a venture in the belief that it would have the curative effect of removing the depression. Those who use tia«

confidence in association with ft remedy imply that confidence is a voluntary act that brings about prosperity by the application of moneys which would act like the application of manure impoverished soil and restore its fertility. That, there is a strong apparent similitude in this analogy is undeniable. The removal of money from circulation obviously contracts the power to purchase, which again adversely reacts upon the power to consume, but here the analogy ehds because other factors enter which the pro« pounders omit to mention, Confidence rests upon faith, that certain th»«ga will happen when certain acts are performed. If ii the repetition of these acts followed by beneficial results that creates confidence and causes us to expand our activities; in anticipation of further gain by similar activities. In this belief the has been grievously mistaken. Nature rules, and man's boasted claim to mastery over Nature ia but one of the 4 many fantastic claims of the modern educationist, resting upon a pagan foundation, Who was it said that 'the tree shall be judge* by its fruit" which is an infallible test •of permanent duration, and in the hand* of intelligent people guides judgment to act for our self-preservation? We are by Nature endowed with power that ex« pands with the knowledge gained by experience, hence we are wise to consult those who are professional experto an* possess experience. Now who are tne most qualified and trustworthy to consult for advice upon (the results that would follow from a group of persons in fuU possession of confidence, prepared to embark upon an enterprise involving the investment of money? It is well known that a section in the community is in possession of considerable sums of money available for investment, but many of these have no knowledge or .experience that gives them confidence. Money may be invested in new enterprise pr it may be invested in shares in old-established concerns, but these have only a remote influence in securing an increased volume for industrial circulation, and. therefore fail in restoring prosperity to the farmer because new enterprise is an unknown quantity and old-established concerns are more than adequate to supply ; . present demand. The person most qualified to answer the question is the banker whose business it is to advance the necessary information if credit is required. The fislc •involved demands expert knowledge on the part of the banker, and. his terms and readiness to advance credit indicate hie degree of confidence in the venture, which is never made public. The talk about regaining, confidence is merely ft picturesque expression, a platitude for public consumption. In all, the plane published in your columns during the last fortnight—the Douglas Credit, Mr James Taylor's address, the Rotarian plan, and the Legion reform policy—there is a clear misunderstanding of the origin of the trouble which arises not from a lack of production, but from " maldistribution." Not, from a shortage of currency, but from a mal-assessment of monetary value both of labour and .commodities. Distribution deals with commodities in process of production, and value deala with their correct appraisement in exchange. The system employed is the jpftrt that requires correcting and falls jvitmn the scope Of the - legislator's funenqnt* explain.—l am, etc., ■„.-■' W. SIVEttTSEK-