PUBLIC DEBTS

Wanganui Chronicle, Volume 74, Issue 151, 29 June 1931, Page 11

PUBLIC DEBTS

Sir, —Your correspondent "J. Siddells” in drawing attention to the seriousness of New Zealand’s indebtedness advocates the printing of paper money to pay all internal interest and taxation. This reads extraordinary from Mr Siddells’ pen. Did not Mr Theodore, financial Treasurer to the Commonwealth of Australia, advocate a small inflation of the note issue there to try and get Australia out of their difficulties. Was this not condemned by oui banking financial experts and the Press throughout the Empire as only befitting the Labour Party’s impotency? Has your correspondent changed his opinion on these financial questions and subscribes to the Labour Party’s inflation suggestion! Mr Watson, chairman of the Bank ot New Zealand, in his address to the shareholders lately, suggested that as the moratorium of the note issue, would be running out shortly, nc doubt the Government by Order-in-Council would be renewing the same and extend the moratorium for another three years. In other words, all the notes of the private banks of New Zealand arc to be continued legal tender without any gob! backing. New Zealand has been off the gold standard, for with the note issue inconvertible there has been no need for a gold backing. Can you, Mr Editor, or your correspondent enlighten me as to. the necessity for renewing the note issue moratorium. in view of the fact, that the banks have had more gold than was necessary to cover the note issue. It has always seemed remarkable to one as to whv the bunks have frozen this gold. Since 1914 the average holding has been £6,000,000 non interest bearing, whereas at an average of 5 per cent earning capacity the, banks have lost’since 1914 £300,000 a year or £5,100,000 over a period from 191-1. In conclusion. Mr Siddells 1 belated proposal that we should pay all our internal interest and taxation with paper is hard to understand. My conipany lias paid out thousands and thousands but. it has always been with bits of paper. No. Mr Siddells, your rcuicdv is altogether fallacious. P. F. TREVOR.