Readers Opinions

Poverty Bay Herald, Volume LXV, Issue 19805, 6 December 1938, Page 16

Readers Opinions

I Letters to the Editor I | Letters Intended for publication should = : be brief and confined to subjects of • 5 general public interest. The name = 5 and address of correspondents should I s be enclosed, not necessarily for publi- § | cation, but as evidence if good faith. § !•» ■ »»0 Q.iii."... — ...... \

Fifth Largest City-

Sir, —Would you please tell me which is the fifth largest city in New Zealand, also the population of Wanganui, Palmerston North, and Invercargill? T. R. [According to the last census, the fifth largest city in the Dominion is Invercargill, with a population ol 25,682. Palmerston North has a population of 23,953, and Wanganui, 25,312. Ed Herald.]

Economic Problems

Sir,—Much has been said and written of late regarding the economic situation, and much thought has been given to the question, not only here, but practically all over the world. Almost every country is in serious difficulties. Rising costs, adverse trade balances, unemployment, semi-starva-tion, for the lack of the power to purchase the means of livelihood, truly an appalling situation. Greed, selfishness, profits, are the causes of the world's troubles to-day. Under the present financial system profits are the essential factor. This has created among nations and peoples economic slavery. Borrowing by States has added to the burden.

Who pays? The investor in Government loans? No, he gets his interest. The man engaged in commerce and business? No, he budgets for the same profit. Then the worker in industry must be the one to pay in reduced purchasing power, currency deflation, increased prices to meet overhead, which is interest charges. During th e last 30 years, the New Zealand pound has depreciated probably 60 per cent in purchasing value to the consumer, due entirely to the borrowing of money by the State and municipalities, and the inflation of city property values.

Interest rates have not fallen anywhere in the world in proportion to the purchasing value of the pound. The investment value of the pound in reality is only equivalent to its purchasing power. Suppose the p'fesent system should function for another 30 years, which is impossible, what would be the position then? Further huge indebtedness added to the present burden, interest charges being added, businessmen insisting on their usual profits. Where will the industrial worker be? What will his pound purchase then? I am afraid he will have departed this life ere then, there being no share for him to enable him to keep body and soul together.

New Zealand has elected a body of men to Parliament, earnest in their endeavour to arrest this dangerous drift. They are meeting with strong opposition from the capitalistic class and the ignorant, supported by practically all the press of the Dominion. What is there to be afraid of in the mind of the Government? Nationalisation of the land? No, that was a bogey raised purely to get the support of farmers. The restriction of borrowing? Yes. Money must fall on the investment market to its true value in relation to industry, that which it earns after the worker in industry receives a fair share. Hence the hurry to get it overseas, where, as. yet, they have rot sufficient enlightened men in control of their affairs to see the dangers ahead. It is the duty of the Government to work out ways and means to restrict the actions of any individuals or groups which may be detrimental to .the people as a whole, and I feel assured that they will meet the position creditably.—Yours, etc., SERIOUS.

Dominion's Finances

■ Sir,—Your comment on my letter of December 2 stating that the Reserve Sank has not discounted a bill seems strange. What was the significance in increasing the rate and why the_ pronounced comment by financial authorities in England and elsewhere if it was merely a gesture? Whilst agreeing with me that the vital requirement is to expand the volume and variety of secondary industries, you .remarked that I did not say how. I think a student who is not a technical expert in the numberless factors that would be involved should ibe satisfied to suggest the | direction only but must, of course, be prepared to defend his views with reasonable logic if challenged. This does not arise on this occasion, but I am very interested and perhaps in the future I will give my views for what they are worth. In .Saturday's issue you eluded the London (Daily Herald for its advice to New Zealand, saying that it came strange as their original advice was the tcause of some of our problems. Would not the truth be that their first advice was sound with the conditions then operating, and their recent advice equally sound taking into account the changed conditions? Also that the changed conditions were not a consequence of their previous advice. The causes I think were (1) a fall in export values, (2) a fall in production —causes outside of political administration; (3) export of capital; (4) the preference by the consumers in their new prosperity Tor goods that at present have to be imported such as cars, wireless sets, washing machines, etc., that they had never owned before. I am of the belief that the recent experience will be found more than worth while for the valuable data that will be available when organising the necessary adjustments. I cannot conclude without referring to the fact that in Saturday's issue you again put forward the idea of a £10,000,000 internal loan to cancel advances .from the Reserve Bank. I will merely say that faking everything into consideration, if that sort of thing is not put a stop to for good and all, there can be no peace, no stability or prosperity; there can only be chaos and despair. , LOOKING FORWARD. !

The significance of the discount, ratewas explained by the governor of the Reserve Bank in the following words: "It serves to indicate the bank's views as to the level at which the general public should be able to obtain accommodation against first-class bills." The inference is that the recent increase in the discount rate, which was advocated by "Looking Forward," was intended as an indication to the trading banks that their lending rates should be raised, which was condemned by "Looking Forward." It is contended that the changed economic conditions are. in part at least, due to following the policy advocated by the Daily Herald, The artificial rais-

ing of costs contributed to the fall in production, the financial proposals were responsible for the export of capital, and inflationary measures and increased internal costs led to the excessive demand for imported goods. Ample warning had been given of the possibility of a fall in export values, but it was argued that New Zealand could insulate itself against overseas conditions. —Ed. Herald.