ALLEGED “FLIGHT OF CAPITAL”

Timaru Herald, Volume CXLIII, Issue 20899, 1 December 1937, Page 8

ALLEGED “FLIGHT OF CAPITAL”

To the Editor ot *’ The Timaru Herald ” Sir, —Some days ago there was published in your columns a statement by the Young National Party drawing attention to the difference between the Finance Minister’s attitude to investment of money, a statement camouflaged under the words “flight of capital,” and the attitude of Mr J. A. Lee, M.P., as set out in his booklet, “Money for the People." I have since read Mr Lee’s booklet and find him a strong and uncompromising supporter for closing the field for investment to all but Savings Bank depositors, for State internal money requirements. Whether a loan of £7,000,000 at 31 per cent is subscribed, or whether or not an extra half crown attracts the investing public, does not concern Mr Lee in the least. Nor do I think it greatly concerns the Finance Minister or any Government member. If it did this scribe would want to know why the Reserve Bank Amendment Bill was passed; why the Government have taken full powers, and closed every avenue of blockage likely to render nugatory the securing of this £7,000,000 at any rate of interest—or at bookkeeping charges. The low rate of interest disturbs not only the Young

National Party, but the Leader of the Nationalists is also concerned. And not at the low rate alone, for he sees the day ahead when those who live on national indebtedness, as Professor Soddy has it, will cease absolutely. National indebtedness as a means of income has been a thoroughly profitable business for the friends of the National Party, young or old. Mr Lee details certain conversions since Labour’s advent to office. Four millions sterling 6 per cent to 35 per cent. Twelve millions New Zealand 6 per cent to 31 per cent. Your readers can figure out the saving to the country, and precisely that saving represents the loss to the six per centers. During a period of acutest depression, sanctity of contracts (of possibly a goodly number of tax-free six per cent bondholders, whose representatives were elected on a “blank cheque” which they promptly filled in and deposited in the bank of sanctuary) was at Niemeyerlc dictation drummed into the peoples of these islands—in blunt brief words, human values were mercilessly subordinated to money values. The present administration has reversed the order and its reversal does not suit the creed of the Leader of the Opposition and his old and young following. lam greatly intrigued by the expression “flight of capital." What is capital? “The best and simplest general type of capital is a well made plough share," says John Ruskin. “Now, if that plough share did nothing but beget other plough shares in a polypous manner—however the great cluster of polypous plough may glitter in the sun, it would have lost its function as capital. It becomes true capital only by another kind of splendour—when it is seen ‘splendescere sulco,’ to grow bright in the furrows. . . . rather with diminution of its substance than addition. .. by the noble friction. It is only capital proper (caput vivum, not caput mortuum) when it is thus producing something different from itself.” —I am, etc., T. POWELL. Albury, November 26.