Poverty Bay Herald. PUBLISHED EVERY EVENING. GISBORNE, TUESDAY, SEPT. 7, 1926. MAKING MONEY

Poverty Bay Herald, Volume LII, Issue 17132, 7 September 1926, Page 6

Poverty Bay Herald. PUBLISHED EVERY EVENING. GISBORNE, TUESDAY, SEPT. 7, 1926. MAKING MONEY

Tin 1 great, adventure of the ilav is to make money. Those who have it want more; those who have not got it arc prepared to go to great lengths in order to get it. It is in vain that economists teach that money in itself is nothing; at the most they say it is mere indicia of wealth. For all that, arid (lie truth of the teaching seems to be incontrovertible, every one feels happier when these marks of wealth are available in the pocket, or better still, though that is a memory only, in the sovereign case. The convention oi our farmers—and in this they do not stand alone —is that they have in their lands real wealth: that they must have money, or assured credit, to pay for improvements,- reparations, and fertilisers. They also say that they cannot got more money than they have already borrowed, or for replacement loans, with a cash margin, sullicicnt to enable them to, make their farms pay. Therefore it is up to the Government to see them through. .The only capital any country can draw upon is the'savii:gs of its people. Jf these savings are sutlieient, capital will How towards the farmer, provided the investment offered is a sound one. To arrive at a conclusion as to the true value of the security offered the capital value of the hind, fixed. upon the value of its net average returns has to be calculated The ditlicultv appears to lie just here. The fanner, who was not an original settler upon unimproved laud, has in \ cry many eases bought in on a wrong basis of values: he has often taken current returns ut a particular time as normal returns which he could roly upon in perpetuity. He has been tempted, thereby, to accept a purchasing value which had no real jusiiticatwin. Capital for investment in farm securities is either adequate, or nonexistent: if it is adequate, j| will meet tin' investment; if ii is noni xistent, no inducement the Government, or any other authority or power tail give will produce it. There seem to be many persons su mentally constituted tligt in the consideration of finance they at tempi to carry dreams into the actual waking realities oi I'iosaic, life. I‘ersons thus electing to remain, ii| dreamland, and who are possessed by this obsession, seem to think that.by altering the charters of banks or other financial institutions, or by setting up against them a gigantic State concern, which is to be' favored by the producers, as a body, if their loyalty is to be relied upon, that more money could be made, or at all events be rendered available. At the local meeting last Saturday, one or two

of those present appeared to base- their claim for a State Bank upon the assumption, that ait the money die banks made am) circulated in tlieir businesses belonged to tin l people of Mew Zealand. This is not true, even of the money deposited in the Post. Ofliee (Savings Bank; much less is it true of the banks, or any one of them, which are proprietary institutions and draw their money from an area immensely larger than Xew Zealand. There is niue.li to be said in favor of a State Bank. Tito Government's interest in the Bank of Xew Zealand lias been so profitable that it is tempting to feel that that interest might be increased with public advantage. As against that, it should not be forgotten that the increment of value to the Governments’ interest in the bank has been obtained through skilful management by non-political experts who have paid pretty dearly for tlieir acquired experience. The Bank was pushed beyond its powers by its earliest promoters, who were seized by the same urge which a Government bank would find it so hard to control, an intense desire to meet the acute demand for money by settlers who had virgin land, but little capital, and who wished to ante-date the prosperity which they saw before them in vision, and which they know could bo secured by hard work, aided by money. The Bank’s present prosperity, in which, without any .sacrifice, the Government has a permanent and considerable shave, has been built tip upon an experience which has boon costly to past shareholders. The new departure made by the Bank which is now before the House will still further increase the Bank’s usefulness and should work in with the extension of usefulness now also being given to the State Advances Department. Until the Government cun bo shown how the setting up of a State Bank can add to the capital available, from till present sources, for local investment, at moderate rates id interest, it had better let banking experiments severely alone. Brains and hard work will often capture money; money may thus be drawn from one po-'ket and placed in another. la all speculative business of this kind, a risk has to be adventured. Business of the kind does not add a penny piece to the capital available for investment in any locality; it merely changes the ownership of a part. Sir Ernest Bonn in his attractive book “The Confessions of a Capitalist,” tells a story of a speculation apart from his business proper, in which lie indulged. The British, fleet were to come into the Thames upon a demonstrative visit, remaining on view for a few days. The visit, suggested to Sir Ernest that money might be attracted by providing comfortable, if rather expensive and exclusive accommodation, upon a first class steamer in connect ion with a railway, adjacent to the anchored licit, with which arrangements might be made. A few days’ strenuous work, encroaching indeed upon the nights, completed all arrangements. Capital through a friend was assured. The project was well advertised, carried through and succeeded. Sir Ernest Bonn and his friend each netted £IOOO, without the expenditure of a sixpence, for the ticket money came in fast enough to meet all cash on! lay required. Sir Ernest Bonn worked very hard for a few days for ];is £IOOO, but lus fortunate friend did nothing, and found nothing, but his credit, for his reward. Gipsy Smith, the well known evangelist, replying to hecklers last Sunday evening at Auckland Town Hall, who accused him of having, ns his object, the making of money, was heard in Gisborne replying that his critic might himself lake the Town Hall and charge one and sixpence. on one night, for admission, and see what lie could make of it. The evangelist was well entitled to his one night's takings: it was his personality behind his message that drew the crowded hall. Ho did not make the money ho received: no one of that vast audience probably grudged the transfer of the one and sixpence. Xo new capital was created. The wafers wore stirred, that was all. There is a child’s card game called “Beggar my neighbor.” The pack is divided and then by alternation of cards and payment in kind for royalty at differential rates one player or the other soon becomes possessor of the whole pack. If 100 men were to be placed upon an island with 100 sovereigns apiece, and instead of going to work they surfed an anu.lagous game of beggar my neighbor, until one man possessed the 10,000 sovereigns and 1 lie ninety-nine others had nothing, they would all starve. The owner of all the gold would be no better oil’ than any one of those who had none. America has the Vaults of her bankers full of the unutilised gold of the nations of Europe. She is the poorer because of her treasure trove, for she has deprived the nations of Europe which were the purchasers of her manufactures and produce, of their purchasing power by exactly the amount of treasure which lays idle in the vaults of Xew York. Work appears to be the only means by which wealth can be increased. The gold of the Kawtirau will undoubtedly, if obtained, enrich those who obtain it: it cannot add to the wealth of the world, unless there is some increase itt actual production of saleable goods. In this seems to lay the suicidal result of lock-outs and strikes. Any stoppage of work must reduce the resources of all concerned in it. In make money by tefusing to work may be to worship independence, but it certainly is to cuddle poverty.