THE ECONOMIC CRISIS

Otago Daily Times, Issue 23894, 23 August 1939, Page 17

THE ECONOMIC CRISIS

TO THE EDITOR

Sir, —Your correspondent "A. 8.," referring to my letter in your issue of August 19, says: " Generally he blames the financial system for all the trouble." Yes, I do, and the blame is placed upon the financial system for the following reason: The trade and commerce of the world are conducted under a system of loan finance. It follows, therefore, that the conditions under which trade and commerce proceed are set by the lenders of finance. If I interpret "A. B." correctly, he seems to think that political influences are responsible for our economic trouble. They are only indirectly responsible. In so far as politics are concerned, Governments and business firms set in equal subsurvience to the dictates of the masters of finance Governments, like business firms, are the subjects—willing or otherwise—of an all-powerful financial system. The illustration cited by "A. B." is a case in point. He says: "If the Ottawa Agreement had never been adopted and further restrictions not imposed this year, and every meat producing country had been tree to export, all its surplus meat to England, prices would, without question, have fallen considerably. It is quite possible New Zealand would have exported the extra million carcasses and found her sterling balances even lower than they are now." "A. B." asks if I would blame the financial system for this. I certainly do blame it for this. The only alternative would be a suggestion that the British Government is deliberately prohibiting the importa-

tion of this mutton in order to starve the people. That surely cannot be their intention. No, the Government prohibits the importation of this mutton because its presence in the country would adversely affect the money market. To what other cause than the conservation of financial interests can such a restrictive measure be attributed, especially when a large number of people in Britain are physically unfit due to malnutrition? "A. B." is quite right in his opinion that in this case the failure of New Zealand sheep farmers to replenish the sterling coffers in England is due to enactments of the British Government. The final answer, however, is not given when it is stated that these enactments were passed in the interest of the British home-pro-ducer Going a step beyond this stage, it becomes evident that the financial system is such that the British homeproducer has to be defended against the actions of the New Zealand producer. But the situation becomes still more involved. In the interests of the British home-producer the New Zealand producer is prohibited from sending his surplus of mutton to Britain. This reacts on the New Zealand solvent business man, who in consequence cannot buy sterling. And

now for lack of sterling funds New Zealand industries will languish. All these mutually injurious elements in our business relationships are due to a financial system which functions for its own exclusive interests and is negligent of the rights and needs of humanity. Answering a question at the close of "A. B.'s" letter, I may say I do believe that a financial system is possible whereby the purpose of a beneficent Creator will be carried out. Such a financial system will be concerned only with the best methods of distributing to all the bountiful supply of Nature to meet man's every need and provide facilities for the fullest development of all his talents.—l am, etc.. Win. W. MacArthur. Dunedin, August 22.