STATE MARKETING

Otago Daily Times, Issue 23885, 12 August 1939, Page 19

STATE MARKETING

TO THE EDITOR Sir,—“J. D.” for the first time, correctly interprets me because I do blame the anti-Labourites for their financial policy during the depression years. Finding the warehouses and retail stores full of unsaleable goods and the cool stores filled with unsaleable meat and butter, they decided that the remedy was to reduce the purchasing power. They therefore cut down everyone’s wages and added to the unemployment which this policy created by closing down on many essential public works. Parents became unemployed and their children cried for food. Many families lived in one room to save the rent money to buy food. Having a family of twelve children. I was better off than they, because, being then on a farm, and third-class land. I was able to give my children all the butter they wanted, the bacon or meat they needed, as. when these were unsaleable, they could be eaten. The poor unemployed had to go without or else pay for fuel such as my family collected on the farm: they paid for potatoes, vegetables that we had for the growing. The advantage of third-class farhl land during a depression is that its land value being low. the interest is less than that of a house in town, in which the unemployed were forced to live Yesterday’s sales at Burnside, telling of a, record price for stock, are the answer in favour of Labour’s , policy of good wages and State marketing of dairy produce with a guaranteed price. How could the workers pay that price for meat? That price means that unless they got regular work at good wages, how could the dairy farmer nay the price for the extra dairy stock to add to his herd unless he had State marketing with a stabilised guaranteed price which ensures looking ahead. The price of dairy stock is at last payable.

Right under the letter by “J. D..’’ Mr C, H. Taylor, of Awamungu, gave figures which conclusively prove that the Coates Governments, before the depression, created. booms by borrow inc vast sums of money at a time when the prices for our produce in the world’s market were high. To follow that with a cessation of public works when the prices were low created a mess that had to be cleaned up. To show that “J. D.” is humbugging when he writes about the costless price advocated by the Communists, as he calls us. one has only to recall that in August, 1934, the Reserve Bank was first started by the opponents of Labour with a subscribed capital of £500,000. Yet its first transaction Involved the bank in the taking over of £23,000,000 of London sterling for which it had to pay £28,520,000 in New Zealand currency. Where did the Reserve Bank get the money to complete the transaction? It created it as it was found necessary. Reserve Bank notes and book entries, which could have no real existence without the people’s credit, constituted the only machinery necessary. It was, it seems, not a crime to create that costless credit to take over the £23,000,000 of sterling when the Tories were in office during the depression. The cripie now exists, it seems, in using that form of costless credit to carry out some necessary public works or to subsidise the price of dairy produce to bring it up to the guaranteed price to help to make the selling price and the producing costs equate each other. To show how absurd their reasoning is, the storekeeper who gives an honest worker credit until pay day does wrong to give costless credit, for it amounts to this. “J. D.” believes that form of costless credit is wrong. He appears to think that the honest worker should have borrowed his money at the current rate of interest from a private moneylender, which money he must repay on pay day to the lender. But just as the workers prefer to use the costless credit each fortnight granted by the storekeepers directly to their customers rather than be loaded with unnecessary interest, I hope the State will use its own credit to finance its own internal policy. Why should the people’s credit be used for the use of financiers only? Instead of borrowing it back from financiers it is time it was used to aid directly industrial development, and thereby cater for human needs. —I am, etc., J. E. MacManus.