POLITICAL DEBAUCHERY

Otago Daily Times, Issue 25579, 5 July 1944, Page 3

POLITICAL DEBAUCHERY

Sir,—Several of your correspondents would blame the Labour Government for financing the war with the aid of a large issue of Reserve Bank notes. All capitalist governments do the same. During the last world war a Conservative Government used the same method in New Zealand. Even during the Napoleonic wars the Bank of England performed the same service. Under Socialism, with public ownership of the means of production, the materials and necessaries of war could be appropriated directly without being exchanged for money, but under private enterprise the Government must buy with money whatever it requires, and to raise such an enormous amount of money it must resort to every conceivable method. Alterations in the currency can never be just, because whereas the rich man probably has only a small proportion of his wealth in the form of money, the poor man often has all his savings represented by pounds in the bank. But this is only one of the many injustices which we must suffer under capitalism, and for which the Labour Government cannot be held responsible.—l am, etc., H. Gow. Balelutha, July 1.

Sir, —" Matilda ” moans that Mr Savage’s Reserve Bank Bill gave “ power to suspend the transfer of New Zealand currency into sterling,” It was the use of such power that enabled Mr Nash’s repayment of Nationalist loans amounting to £17,000,000, which had fallen due for renewal to be arranged for on a table mortgage basis. Because Labour pays the Nationalists’ national debts it secured the renewal at the lowest rate of interest payments any other dominion could obtain because payment of debts is not debauchery of currency, but a policy of financial stability. Had the Nationalists, instead of putting on a 25 per cent, exchange rate, adopted the expedient which Mr Savage first suggested at the time to them, we would not to-day be paying Great Britain 25 per cent, over and above sterling to pay for our soldiers’ equipment during the war. Mr Downie Stewart, when Minister of Finance, was far-sighted enough to see the effect of such a debauchery of the currency, and resigned from the Nationalist Cabinet as a protest against it. The reference to our currency being called “phoney” by “ Ivlatilda ” recalls that during the 1914-18 war I was paid, when in England, on leave, in pound notes known as “bad Bradbury’s ” by Englisn moar-ers. When I went to Australia 16 years ago. for my New Zealand pound notes- I got Commonwealth notes which were sneeringly called “ Fisher’s flimsies. With the remarkable assets behind -our present Reserve Bank’s Fraser phonies we have a housing system repaying to the bank all the credit it created. We have also the great expansion of our manufacturing industries and development of resources which in peace-time, with manpower available, will blossom like the rose in a land untouched by enemy bombs in comparison with overseas war-wrecked lands.—l am, etc., J- ?• MacManus.

Sir—ln last Saturday’s Daily Times Mr J. E. McManus is enthusiasts over the credits created by the Government through the Reserve Bank, and other correspondents have written in the same strain. Shortly, the statement is that the £23,000,000 borrowed has cost the country nothing, as there is no interest to pay But Mr Nash, when explaining the Government's policy, said the houses would be built at a cost of about £BOO, and would be let at a rent of approximately 15s a week. The houses now cost about £ISOO, and the rent is over 30s a week. An extra rent of 15s will make as big a hole in a week’s wages as an interest payment of 15s would. What is the use of reducing interest if you have to increase the rent by an equivalent amount? Can Mr McManus enlighten us on that point?— I am, etc.. Tyro. Oturehua.