THE BRITISH CRISIS

Otago Daily Times, Issue 26540, 15 August 1947, Page 9

THE BRITISH CRISIS

Sir,—l wish to support Mr James Begg’s suggestion that New Zealand should write off the. sterling balances held to her credit in London. It is clear that Britain needs all the earnings of her exports to pay for current imports, without paying anything off old debts incurred while fighting the war. But if we make this generous gesture it will have some unpleasant repercussions in this country, and if we don't, possibly more unpleasant ones. In the first place, what is going to be the effect on the Reserve Bank? In its weekly balance sheets these sterling balances are put in as a first-class asset ranking pro' rata with the gold valued at £4 an ounce. A Government 1.0.TJ could be substituted. , but if Britain is to recover the hard way, New Zealand will have to travel the same road The idle money in hoards and credit accounts will have to be gathered up to the extent of £100,000.000 by loans, levies, or taxes, and just placed in the Reserve Bank to fill up the gap. Taxes should form at least 25 per cent, of the amount, as the exchange rate we added to an uncollected debt is not a fair bill to hand on to posterity The funds in the Dairy Account and in the Meat Pool Account should be the first straight out gifts to the replacement account.—l am etc.. Aug. 11. Miner