THE FINANCIAL SYSTEM.

Timaru Herald, Volume CXXXVII, Issue 19625, 20 October 1933, Page 13

THE FINANCIAL SYSTEM.

To the Editor of " The Timaru Herald ** Sir, —It can be observed that Mr A. M. Paterson’s letters to your paper invariably display three unusual faculties. The first is the f-culty of believing without a reason. The second is the faculty of hating without a cause; and the third is simply Inconsistency. I do not refer to Mr Paterson personally; I refer to his letters, and my reference to his letters is justified by the letters themselves. Verily, the smallest child, if he could read, would see foolishness in the letters. No doubt Mr Paterson is a sensible man, but unless we were aware of this fact, we would never believe that his letters were written by a sensible man. If it were my task to pass judgment on his letters, I would term them unadulterated nonsense, but my judgment will be unnecessary if consideration is given to his latest letter. It is entitled “The Monetary Problem,” and it appeared in your paper of the 17th inst. It is not certain, but I presume that Mr Paterson's letter is an attack on the present financial system. The letter is very vague and aimless, but I presume that Mr Paterson supposes it to be a wise condemnation of the existing financial system. Now that his letter has been graciously presented with some meaning, a criticism can commence at once. At the_outset, let it be agreed that hominis est errare—that it belongs to man to err; that man and his institutions are continually rolling along towards very distant perfection. And let it be said that until man is perfect, none of his institutions will be perfect. It is here that Mr Paterson errs. Man’s financial institutions, and his other institutions, have all evolved along with man himself. They will continue to do so, and as man becomes more i>erfect, his in- i stitutions will become more perfect. i Howbeit, Mr Paterson would term \ the present financial system a mons- j trosity. He would throw it overboard, j He would discard centuries of evolu- J tion, and in its place he would put j something that a baby could evolve in a few minutes. The financial systern is just what man has made it. If it is imperfect, it merely reflects j man’s own imperfections. But, among other things, Mr Paterson says that the present financial system “has brought the mightiest empires to the dust.” I will ask Mr Paterson a question, and, as Mr Paterson’s letter displays another unusual faculty—the faculty of dodging questions—l will call this question number one: Will Mr Paterson name the empires brought to dust because of the present financial system? Let us watch and wait for Mr Paterson's answer, and in the meantime, let us recall how some great empires have fallen. Greece fell because of petty patriotism to petty , states. Rome fell because of the great parsimony that was developed in the

Roman nature; and the Saracen empire disappeared because of the feuds and jealousies among the Saracens themselves. Every empire fell because of imperfections in human nature. One breaker might go back, but the tide will continue to come in. In the future, there must be improvement, if only because there has been improvement in the past. The financial system has received gradual improvements in the past, and it will receive gradual improvements in the future. I will ask Mr Paterson question number two: Does Mr Paterson believe that the financial system has done nothing to improve the world? If so, he will have difficulty in explaining how science has progressed, because it has been financed by the system. He will have difficulty in explaining how the system has permitted people to have better homes and better living conditions. He will also be required to explain how more people have more possessions. The financial system has suffered many wars. The last war strained it to the utmost. Mr Paterson cries that science has progressed; but. the peculiar thing about his crying is that if the financial system was as bad as he painted it, science would have made no progress whatever. The system has fathered science, and now science strains the system. I will ask Mr Paterson question number three: Does he think tnat the progress of science could have been more rapid than it has been? If not. the financial system is not such a sinner after all. Mr Paterson cannot pose as a sensible man and say that science would have progressed more rapidly under another system. Thousands of people have shares and bonds, or other capital, and thousands of people are really capitalists, because they own something. Our national debt is largely owned by small investors. Still. Mr Paterson'maintains that all the money in the world is held by a few people—and no doubt, Mr Paterson 1s a sensible man. To-day, a financial depression is passing, and the causes were war and dislocation, and then sudden progress, among other causes. Mr Paterson believes that the depression will never disappear unless the present financial system in its entirety, disappears with it. I will not waste time on such a remark. Each day proves that the remark is rubbish. Mr Paterson believes that a Central Bank in New Zealand would place New Zealand under the control of external financial institutions. So I will ask Mr Paterson question number four: Can he quote a clause from the Cen-

trai Bank Bill to show that the Bank will not be controlled in New Zealand? This is where we meet* one instance of great inconsistency in Mr Paterson’s letter. With a loud voice, he rails against private banks; he cannot find terms strong enough to describe them. But. when- a Central Bank is proposed in order to control these private banks. Mr Paterson rails against the proposal. It is very remarkable to note how Mr Paterson makes himself a tool for skilful propaganda. Certain financial institutions in New Zealand fight the Central Bank proposal, and with childlike simplicity, Mr Paterson's letters fight for them. Mr Paterson's letters are so weak and watery that they fight against genuine progress. It is really a pity to criticise his letters; they are below criticism. Now to conclude, there is a great amount of hot air in Mr Paterson’s letters, and this letter has only touched a small part of the mess. Howbeit, the great remainder can be safely left to condemn itself. This letter was not written as an attempt to prove that here has been no misery and suffering in the world. The letter was merely written to show that Mr Paterson would never remedy that misery and suffering. —l am. etc.. VIDIMUS. Timaru, October 18.