Pettifogging Queries.

Thames Star, Volume LXVI, Issue 19604, 9 January 1936, Page 3

Pettifogging Queries.

STATESMANLIKE READINESS. KNOCK-OUT TO “INFLATION” BOGEY. NO BANKING SYSTEM CHANGE. (By Telegraph.—Press Association). WELLINGTON, Jan. 9. When a reporter yesterday remarked that the country awaited legislative plans with the keenest interest, especially as to the extent of monetary inflation, the Premier took exception to the use of the world inflation. “You cannot call it that,” he said. “Don’t forget that in 1922 the former Government cut out money from circulation by reducing wages. Our farmers tried to catch up with reduced prices by doubling production in ten years and found their incomes the same as at the start. Then, at the end of 1932 and in 1933 the Government again removed money from circulation by further reductions of wages, though production was still increasing. Suppose we start to put back into circulation the money which was taken out of the stream. Can you call that inflation?”

"It all depends on the extent of the process," suggested the interviewer.

"Is it fair to call inflation the putting back of what was taken out?" retorted the Prime Minister. "Call it by any name you please, but I say if you double production, the producer is entitled to an increase in his income in line with the increase of useful, usable wealth, but he did not get it. Our view is that so loii& as money keeps in correct relationship with useful goods and services there is no such thing as inflation. Increase these assets, and we expect the money supply to keep pace. Otherwise these useful goods and services have to be exchanged at a lower price, but Ave are wise enough to know that we cannot make the people of New Zealand rich by simply printing money,"

Financial Control,

Monetary matters will be considered when Cabinet has disposed of some of the accumulated routine questions. Mr. Savage does not anticipate any change in the banking system. He said that the present banks would continue to function, as he saw no reason to interfere with them, but what would be altered would be the administration of the national financial system.

Frightened people could take courage that the Government would utilise its national credit to the best advantage of the country, and nobody's savings would be jeopardised. It is the Government's hope that when Parliament assembles at the end of February or early in March there will be at least three or four bills ready for introduction. The Hon. M. J. Savage takes the view that since the Labour Government has no past, a prolonged Address-in-Keply debate, would be a Avaste of time and money, as the members have nothing definite to talk about. With the bills before them, Parliament's time will be usefully employed from the incepton of the session.