INFLATION IN DOMINION

Otago Daily Times, Issue 26559, 6 September 1947, Page 4

INFLATION IN DOMINION

REHABILITATION AFFECTED EX-SERVICEMEN’S PETITION Parliamentary Reporter WELLINGTON, Sept. 5. The enactment this session of Parliament of legislation stabilising the general internal price level and controlling the creation and issue of currency was urged -in a petition from the Dominion president of the Second N.Z.E.F. Association. Mr K. M. Melvin, of Auckland, which was presented in the House of Representatives to-day by Mr P. G. Connolly (Govt.. Dunedin Central). The petitioner claimed that every person in New Zealand was being disastrously affected by the declining’ purchasing power and the depreciation of savings. The association, at its annual meeting in Wellington last month, had recommended the presentation of a petition embodying remits on the subject of stabilisation adopted at that meeting, stated the petitioner. He added that the Dominion was now suffering visibly and demonstrably from the unprecedented qnd disastrous expansion of credit money resulting in'an actual and provoking potential increase in the note issue disproportionate to the exchange function of the currency. Tlie principles of monetary control so clearly advocated by the Government and the Opposition alike had not been put into operation, with the result that ex-servicemen of World War II were finding that the Legislature’s intentions for their rehabilitation were being thwarted and nullified. The petitioner claimed that much of the country’s present industrial unrest was due to inflation, workers being’ driven to the futile expedient of pursuing increased prices by means of belated wage increases. People needed real wages, not more money tokens nor more pound notes to be swallowed up in increased food prices. Until the monetary inflation was remedied, the workers had no proper incentive to increased effort. The petitioner therefore asked the House to pass a Bill stabilising the internal price level as determined from time to time by price indices, and placing a statutory obligation on the Reserve Bank or some other properly constituted authority to control the creation and issue of currency and credit to this end, thereby ensuring the maintenance of a stable purchasing power in the monetary unit—the New Zealand pound note.