THE HOUSING TRAGEDY

Te Awamutu Courier, Volume 72, Issue 6243, 17 June 1946, Page 5

THE HOUSING TRAGEDY

Sir, —It is regrettable that the editorials of other papers do not display the same clear thinking evidenced in your editorial of sth June. The housing problem has arisen from a long chain of governmental actions which arose from mistaken ideas. Acts of Parliament as far back as 1916 which we thought were wise were the essence of stupidity. We restricted rents and interfered with the rights of owners to the possession of what they owned. We interfered with the natural law of supply and demand, forgetting that any temporary shortage creates a rise in rents or prices, and that, if freedom of action rules, capital, .ever in search of profit, is attracted and automatically flows in to satisfy the demand. Only in this way can the needs of the people be provided. All around New Zealand and all over the world lies conclusive proof of this, and the more the State tries to plan production and distribution the more confusion is added to confusion.

Your quotation from Mr Nash that the State housing programme has created difficulties shows the truth of Professor Tocker’s statement that the State housing programme is the root of the creation of the £117,000,000 of new money in circulation. We are now on the horns of a dilemma. With all this surplus money in existence we cannot relase control of prices as, with goods being short in supply, there would immediately be a huge increase in prices. There must be an expansion of production but the professor points out that the most effective method of preventing the expansion in production is the existence of controls, particulaly the control of prices. We are caught in a trap, and the only way out of it is to get rid of a large proportion of this dangermoney. This can be done by the State selling some of its assets—[war assets and some of its State houses. By this means the volume of money can be reduced. \

We want more houses and cheaper houses, and in our folly we have adopted the method which can only give us less houses and dearer houses. Our ideas have been all wrong, and unless we abandon our false beliefs the position must develop from bad to worse. Wte have yet to understand that the needs of mankind can be provided only by individuals operating under the free competitive system.—l am, etc., SPECTATOR.