THE PRICE OF MONEY SIR,—Mr. Davenport's 'timid' reader would like
to offer the right end of the stick to Mr. Harold Lever.
I invited Mr. Davenport to demonstrate with a few lines of algebra that manipulating the rate of interest (his words, not mine) in favour of social expenditure on, for instance, housing was different in effect from increasing the housing subsidies. He avoided my invitation and Mr. Lever seeks to con- fuse an argument which he seems not to understand.
The question can be formulated as follows: Suppose that a government (any government) establishes its credit in terms of an average rate of interest (long, short and middle term) for all capital expenditure at x per cent and then chooses to lend funds to housing authorities at (x — y) per cent; then an alternative pro- cedure which will secure a similiar overall result would be to lend money for housing at x per cent and to pay a bigger annual subsidy. Mr. Davenport may like to negative this propo- sition; Mr. Lever may also try or, better, maintain a discreet silence.
J. H. COLLINS Chairman, Widnes Finance Committee 5 Shelley Road, Widnes
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