DOUGLAS SOCIAL CREDIT

Waihi Daily Telegraph, Volume XXXVII, Issue 9208, 12 April 1938, Page 3

DOUGLAS SOCIAL CREDIT

Sor, —“E.N.D.,” in liis warning against those who looked upon the Douglas Social Credit proposals as a solution to the continuance o£ the presen banking system, defended the banks by stating that they lent only the deposits of their customers, to whom they paid a small rate of interest. These deposits they lent to other customers at a slightly higher rate of interest. Now, he freely admits that they lend bank-created or dud money. He then refers me to the February returns of the New Zealand trading banks, showing that deposits far outran advances. In other words, he is convinced that more money has been paid into the banks than has been advanced by the banks and that none of this money could be dud money. In his address to the shareholders of the Midland Bank on January 25, 1924, Mr McKenna stated: “The amount of money in existence varies only with the action of the banks in increasing or diminishing deposits. We know how this is effected. Every bank loan and every bank purchase of securities creates a deposit, and every repayment of a bank loan and every bank sale destroys one.” It is quite evidend that the only people able to interpret the New Zealand bank returns for February, referred to by “E.N.D.,” are the bankers and nobody else. Financial interests alone dominate and control money and credit. Those who produce real wealth are competely at the mercy of the financial magnates, and industry to-day is becoming more and more hopelessly in debt to the money power. They who control the credit of a nation, dictate the policy of Governments, and hold in the hollow of their hands the destinies of the people.” The present control of banking has got to go, or civilisation will go. As long as we allow money to be created and used for the purpose of destroying life through armaments and war, instead of using it for the good of humanity, the result can only be disaster. Improvement can only come when the credit of a country is controlled by the nation in the interests and welfare of the people as a whole, instead of being the plaything of private shareholders who juggle the money and the people to suit their own ends. The definite statements of Sir Reginald McKenna I have quoted should convince “E.N.D.” that the banks do create money or credit out of nothing, and that bank deposits are not the savings of their clients but in the main money or credit created and lent by the banks to their clients. The only difference between a private person and the banks creating money in that way is that the private person gets six months and the Banks six per cent. "E.N.D.’s" last stand in defence of the banking system is that “interest on bank loans comes out of surplus production and the velocity of money.” Money to pay bank interest or for any other purpose does not come out of surplus production, while the velocity of money adds nothing to the amount in circulation. Money to pay bank interest can only be paid by the banks creating the money to pay it with, and the putting of future production In pawn to the banks. This is the system that, “E.N.D.” supports, and condemns the use of debt-free money on the grounds that it would be money without the backing behind it of the goods and services of the people. Will “E.N.D.” explain just what he means by that assertion?—l am, etc., L.F,