SOCIAL CREDIT.

Waikato Times, Volume 114, Issue 19066, 3 October 1933, Page 7

SOCIAL CREDIT.

(To the Editor.) Sir. —The writer has always maintained that the permanent solution of the world’s economic troubles is to be found in the Douglas social Credit proposals. However, we, will now approach the very much-discussed A

plus 'B theorem—a stumbling-brook to many, lnoluding -certain economists. The writer, quite recently, through your columns raised a technical point by asking the following question—namely, does the payment of Interest to an individual constitute an A or a B cost?

The writer will now try and answer the question himself— The payments of Industry, according to the A plus B theorem, are divided into two distinct groups. To distinguish them we call one group A and the other B. Although these two groups are separate and apart, jointly they go together to make up the cost of any given article — or, in other words, their respective payments are included In the cost or price of an article. Here let us proceed: The A payments arc wages, salaries and dividends —wages to workers, salaries to officials (the staff), dividends lo shareholders, all others excluded. The B payments are for raw materials —power, light, rent—and all interest payments.

We can perhaps, io make the position very clear, explain the A plus B theorem another way. It is quite in keeping to say the A payments—wages, salaries and dividends to workers, officials and shareholders—are payments made to persons connected with the inside working or tin; firm —payments made lo those who are connected directly with the activities of tire industry in question. The B payments are payments made to those outside of and apart from the particular industry under consideration, such as payments to the gas

company, rent, rates and taxes, payments to the Electric Power Board, payments for raw materials, instalments on machinery, etc., not forgetting the question at issue—all Interest charges or payments, without exception. In conclusion, If I am correct in my analysis of the A plus B theorem, then the payment of interest, be it to an organisation or an Individual, Is without question a B cost.—l am, etc,. HARRY WOODRUFFE. Auckland, September 30, 1933.