Interest on Trial.

Star (Christchurch), Volume XLIV, Issue 662, 16 January 1933, Page 6

Interest on Trial.

Dear Sir,—Your very interesting leader on interest and usury is timely. It is not new to economists, but those who have held that point of view have not been in the fashion lately. The whole of our industry and commerce is built upon an unworkable principle. The result is that either war or major slumps must come to correct and rectify the incorrect base of action. Twenty pounds invested at 5 per cent compound interest 600 years ago amounts to many times more than the wealth of the world to-day. One penny at 5 per cent from the time of Christ is equal to a few thousand earths in solid gold. Compounding interest has this virtue: it is the best known factor for turning the whole world into a lunatic asylum; but I fancy there are a few stubborn souls left who refuse to accept wholesale lunacy. It is one thing to know what is wrong with the world, but quite another matter to outline the action which is both safe and just. To emphasise too much the wrongness of things is dangerous for ordinary mortals. We need to be instructed and inspired to the right activity. I have for some time advocated compulsory saving without interest as an antidote to voluntary saving for interest. Under whatever system we work a community, a house must be 44 saved No man can build a house in a day or a week; therefore it must be saved by him or byothers for him. But, on the other hand, the very best terms available for our working men were roughly these: He would borrow £7OO from the advances to workers and, at best, would pay £I4OO for that house over a period of years. Thus he bought a real and a mythical house. We have mixed our timber and our ghosts so much that we cannot tell one from another, and the resultant confusion of thought drives the practical man away from thought to motoring. pictures or booze. This country has such wonderful opportunities because of her meagre population. We can extend our civilisation on better lines—if we wish to. I think, sir, you should be congratulated on giving Mr Howard space for his “ Excelsior ” articles. They are antidotes to the Muggins drift which set in in this country some time ago. I firmly believe that if we wish, as New Zealanders, to add a contribution to the civilising and just dealing of the world we should fabricate a new’ w’ing to our society, and the masterkey to that new order should be a universal duty to save what is vital, so that the slippery and subtle paths of interest and usury are avoided. The impotence of the Church In this slump amazes me. Are they so busy savuag souls that they have no time to guide society? I remember reading Conrad on 44 Usury in Church History** many years ago. I suppose Calvin’s excuses for interest have won out completely. But the thought strikes me that the Church could do something by taking up this lazy attitude. Ask each member of Parliament in turn to address the clergy as a body on 44 What are your thoughts on this big slump, and do you know a better way? ** Believe me, sir. some may have to think. Is thinking dangerous?—l am. etc . L. C WALKER.