STATE POWER OF CONTROL

Southland Times, Issue 24249, 5 October 1940, Page 6

STATE POWER OF CONTROL

Dominion Credit And

Currency

“ONLY WAY IS TO USE

GOODS”

(From Our Parliamentary Reporter) WELLINGTON, October 4.

An emphatic assertion that the Government intended to use the power that it has to provide for the defence of New Zealand and for the Dominion’s part in the defence of Britain was made by the Minister of Finance (the Hon. W. Nash) in the House this afternoon when replying to the debate on war finance.

“We are not going to argue with anyone,” he declared, “but we will be fair. If someone has control of goods expressed in money and they are needed to defend the people we are not going to argue. We have to defend this country and the only way is to take the goods that we produce and use those goods.” Replying to specific points raised in the discussion, Mr Nash referred to the Opposition statement that bonds would be worth £65 as “unadulterated humbug.” On today’s market on the basis of 31 per cent, they would be worth £B2. He said that interest rates today were lower than at any time before the Government came into office.

“Our securities today are showing less return for £lOO, which means that they are more valuable than at any period before we were put in charge of the country,” contended the Minister. Mr W. J. Polson (Nat., Stratford): That is overseas.

Mr Nash: No. In New Zealand they are quoted at £3/8/8 and no previous Government was able to raise loans at less than that figure. The Minister quoted the price of New Zealand 5 per cent, stock 1956/58 abroad as £lO7/12/6 on September 26, and the comparable Australian stock at the same time was listed at £lO2/15/-. “Is there something wrong with the prestige of Government securities?” he asked.

Mr Nash said that there would be little more than 18,000 people liable under the war loan. Fifteen thousand of them were individuals and 3000 were companies. This was only a part of the Government’s policy of conscripting wealth. The Hon. Sir Alfred Ransom (Nat., Pahiatua): Are you going to take credit as well as wealth? Mr Nash: We will take everything. I This country’s effort will be measured by the willingness of everyone to sacrifice and greater sacrifice in the fullest sense of the term on the part of those who have more than those who have less. There was no compulsion in the proposal. In the first sense, said Mr Nash, the people had the opportunity of putting in their applications voluntarily and willingly up to a specified date and he believed there would be a big-percentage of people who would be anxious to subscribe but there would be some who would never subscribe voluntarily and the measure was for them. NO INTEREST PAYMENT Dealing with the question of why no interest was to be paid during the war period, which had been estimated as three years, Mr Nash said that interest transferred the right to use certain goods without a price. The Government said it had the right to use all the goods it required for the war for three years without paying anything for the right to use the goods. After that the Government paid £2/10/- every year for every £lOO worth of goods the Government used, but at the end of the period the Government gave back the goods to the person who had the title for the goods. It was complete treason to say that the difficulty would be overcome, continued Mr Nash, by printing a lot of money and issuing it without recourse to the ordinary people for them to buy goods with. If he wanted to destroy the economy of any country, said Mr Nash, he would destroy its currency. He knew what inflation meant. It was not control in the ordinary sense of currency and credit; it was a state of no control. The Government was pledged to control credit and currency but to issue money without any goods being there was a crime against the State and meant the definite deterioration of | every individual in it.