CREDIT—PUBLIC AND PRIVATE

Poverty Bay Herald, Volume LXI, Issue 18386, 2 May 1934, Page 3

CREDIT—PUBLIC AND PRIVATE

(To the Editor of the Herald,) Sir,-—Credit is nothingi more nor less than ability to produce, and the way# and means of gaining this ability is th* rock upon which public opinion divides itself. Our credit is expressed witl* notes which we now call money and w« might well ask ourselves, this token money that buys our gold moafty should be owned privately? Money, as a matter of fact, mean# minted coins, and the name is derived from some heathen god or godess called Moneta, before whose shrine the first ; money was minted. In our day paper ’notes of no intrinsic value' have displaced those coins which, had intrinsic ! value, and a certain distrust in the ! ethical use of these notes has crept in among us, because to-day a £1 note, will not buy a sovereign, although it is supposed’io represent one. We have used it under the impression that it had an equal vnlue with the sovereign and have consistently repaid it with our gold. The idea that tho banker owns the credit which the people use and has a just right to express it, must be overborne, because all the credit which he could muster or lay claim to would he of no use to him if the people had no earning power, and if they have the earning power the credit is most certainly theirs. When we give the right to another to express jn monetary terms tho value of our credit, we give that credit away and with it all which that credit implies. We monetise the value of our credit, or rather the banker has that privilege, and we borrow that money from him quite ignoring, or stupidly ignorant of the fact, that we are buying and paying for that Vhich is already our own—our credit, ( Good management of public accounts is what political economy means and good management implies public welfare. We are not, faring well at the present time and the reason is not far to seek. We actually give the whole gold or internationally valued profit of our labor a way. The process of giiving away is simply illustrated. If a farmer draws £IOO in limes from the banker for his wool and fljte wool is sold in London, it is sold for gold and the gold belongs to tile banker. If the State wants this gold with Which to make a payment in London it must buy it, or borrow it. ( If it buys itjjpt" can only do so by taking the notes nSck from the farmer to; give to the banker. If it borrows it, the country is further penalised with interest demands. Tho only course is to borrow and claim interest through taxation to pay upon the gold the farmer’s produce has earned. This is called Gilbertianism. Money is supposed to operate upon a measure for measure basis and if we hold a sovereign in one hand and a £1 note fn the other we are supposed to have in each hand something of equal) value, but if the sovereign becomes more' valuable than tho note, through a rise in the price of gold, the sovereign is impounded and denied its democratic purpose in providing! public measure for measure. We are then told that we must earn more with the note than we did before. If we cannot do this we cannot get the note and tho whole, industrial machinery stagnates. Onp griat tiling which public finance does not j make provision tor is commercial profit, j and commerce cannot exist without.) profit, therefore .without profit produce cannot be moved. This profit gradually ! absorbs public credit and becomes a, private credit and when public credit; is finally absorbed the public cannot buy and the private credit becomes a. “frozen” credit Public credit is again and again renewed with borrowed money until our interest bill brakes borrowing, in larger sums imperative, and anomalously otir very distress makes borrowing harder to achieve! > The saying that we borrow and bust is quite true,, but it is not optional. We depend upon borrowed money— we have nq other dependence—and as commercial C and industrial profit absorbs tbi* fco&

’.JvJ . , . T. • ■ rowed: moitey, w® must as a natural consequence "bust” sooner of later. The cor® of onr financial effort rest * in the fact that we borrow public credit and public credit promotes industry. If. industry demands & profit of 10 per cent., in ten years th? public credit Lis gon* to private accdiint. If we borrow from account * ‘internal loans’’ t Vittup the ’ limit wo extend oui ' period of. but finally the iw teieSt -payuble.'becomes. sO- heavy that revefittt kduettaxen and trade collapses; There, on the face of the. earth* ahd :fiby?r elm he, who can devisj| ways nhd; mean*.under the present SyjJ- . tern, >jf ’ cofitinuiog it without borrow* ing, aM, there.'is no one t who can jpnff vent; sldiliaW, the inevitable slump pepied. ■ All. profit comes from public account. . Ihiwic account, is reimbursed with: capitalittd and borrowed currency. B*bßt' bfcanse the produce of it»..iabdr goes toward paying for it borrowed txptessioa of its own, credit. Wyatt,, credit absorbs and per medium of money prdfit. 'State'.credit absorbs and destroys private credit, per medium of taxation. itStold credit destroys State Credit, per medium of increased gold price. sll bieaus® we persist in-using a'borrowed and internationally capital*' ised currency to express -the value of our own credit and onr own property* ; if such is buic mentality.—-Youre, e&, . JAS, MPBRISON. k v _ .