“MONEY FOR NOTHING”

Otago Daily Times, Issue 26918, 2 November 1948, Page 6

“MONEY FOR NOTHING”

Sir,—ln the above leader you -built up a “ man of straw ” and with one “mighty” blow of your literary right arm, demolished him. Mr Holland says, and you naturally support him, that the Government has over-budgeted, resulting in an accumulation of “ secret reserves.’ Therefore, to compensate the Reserve Bank out of the ordinary revenue for the loss of New Zealand currency, consequent on the alteration of the exchange rate, would be. to admit the charge oi over-budgeting. This charge of over-budgeting implies that the Auditor-general places his signature to accounts that are incorrect, or that the Treasury officials are submitting incorrect statements to the Government and the Audit Office. In a capitalist democracy the press and politicians have no obligations to prove charges made against their political opponents. You go on to reason that rather than pay out of revenue and thus reveal “ a large concealed reserve.” his (Mr Nash’s! alternative is to turn the wheels of the printing press and issue credit against Government securities for the required sum. This method you say will create a further £21,000,000 to add to the already inflated credit. These assertions are not only Incorrect, but also prove that you are unacquainted with centra! banking credit in a controlled economy.. These isnothing wrong with your quotation from Mr Nash’s statement of 1944. What is wrong, however, is youi failure to state the main reason for th« increases in bank credits “ of many millions ” since 1944. The reasons for thal increase are also given in the Reserve BanV statistics. You appear to have overlooked them. The exports for 1945-46-47 exceed by £57,000,000 the value of our imports: this excess of income reflects itself in the increase of trading bank demand liabilities. This- goes to show that your statement that credit had been issued “ out of proportion to the goods and services available” is a figment of your imagination. The contention that excess of income over possible expenditure is injurious to people will not bear, investigation. In the several crises of the last 150 years, people have starved, not beeaiuse they have had too much, but because they have had too little money or none at all. Even to-day in New Zealand the excessive spending power is not in the hands of the working class, whose percentage of the national income has declined, but in the hands of the profit-receivers, who in the main are politically conservative.—l am. etc., M. Sllverstone.