NOTE INFLATION

Taranaki Daily News, 8 December 1930, Page 3

NOTE INFLATION

EFECT ON LIFE ASSURANCE. The disastrous effects of note inflation on thrift as represented by life insurance companies are emphasised' by the directors of the 'Australian Provincial Assurance Association, Limited, in their annual report. “If. tho Federal Labour caucus attains its objective of . note inflation,” the report states, “it is almpst impossible to visualise the position of life insurance cam panics who hold the greater percentage of their funds in Commonwealth stock. In the past,\tlie greater a cominvestment in Commonwealth stock the sounder has its financial position been regarded by the community, .but no'e inflation will vitiate every bal-ance-sheet in whieh Common wealth /stock figures as its principal asset. To the extent to which the note issue is inflated, so will the assets of such company be depreciated and such company’s actual financial stability’be proportionately impaired. * “The trend of political finance in Australia to-day is. not one .which can cause other than alarm to the investing public ,in ' general, and, in particular, to those who' by.thrift have taken out life assurance policies to provide for their dependant's when such policies become claims.' The Loan Council have now issued their prospectus for the conversion of the £28,000,000; loan falling due December 'l5, 19'30, and it is appealing to the public to subscribe to that loan. There would appear, however, to be no guarantee that the Federal Labour caucus will not ultimately attain their objective of note inflation, and it would therefore seem essential that those Cabinet Ministers who favour note inflation should forthwith resign their posiC.XUj. ’ _