POINTS FROM LETTERS.

Auckland Star, Volume LXIV, Issue 97, 27 April 1933, Page 23

POINTS FROM LETTERS.

MONETARY REFORM.

For years I have struggled in vain to try to understand the Douglas theory, but the more I read about it the greater the maze I seem to be in. What is it all about? I think we can all agree that the state of the world to-day is due, mainly, to increasing production side by side with decreasing purchasing power; that is, an increasing amount of surplus production for which there is no purchasing power. Whose fault is that? , Is it the fault of the financial system, or is it the fault of those who have control of it? That appears to me to be the principal point. Private banking corporations have, for the most part, controlled the supply of money in all countries, but employers of labour, public and private, have been the main offenders in lessening the amount of money in circulation. What is the use of talking about increasing the amount of currency in circulation, and providing schemes for the reform of our monetary system, if we refuse to make the increased amount of currency available to the people in return for their services ? When it is realised that the wages bill of Britain for those registered with the Ministry of Labour was approximately £11,000,000 a week less in 1032 than it -was in 1920, it will not be difficult to see that we need more than currency reform to put the world on its feet. The above figures do not include agricultural labourers, Government employees, domestic servants, shop assistants and clerks. It should be easy to see that as wages fall and production increases, the unsaleable surplus of goods must increase and unemployment continue to grow. I cannot find anything in the Douglas plan to prevent a fall in wages under the competitive system, and although Douglasites claim that they can regulate what they call the just price, plus a form of subsidy from State credit for the producer, it is not too clear how the wage-earner is to be safeguarded. Without fixation of prices even the commercial world would still be subject to the inexorable laws of Capitalism. So far as lam able to understand the problem, it appears to be, mainly, one of control. Any monetary reform that does not provide for., each unit of society a measure of purchasing power which will be equivalent to his or her share of the social product, will have the same weakness as the present system. That brings us face to face with the real solution—so far as it can be solved under the wages system, that is, control of the entire monetary system by the State, plus a minimum wage below which no citizen shall be expected to work, the minimum to be increased as production increases. Douglasites will, of course, say that as wages increase, prices will also increase. My reply is that the State is master in that sphere, even now, under the Board of Trade Act, if it cared to exercise its authority, and in any case control by the' State would be necessary under the Douglas system. Some sort of control is inevitable. We must either change one set of private enterprisers for another, or substitute the State itself as the sole authority for the issue of credit and currency, with full control of the use to which it shall be put. The first and important thing appears to be the transfer of control of the monetary system from private banking corporations to the State itself. Banking machinery may need overhauling and some improvement, but these details can safely be left until the question of control has been settled. For years Labour has advocated this change, and their representatives, in and out of Parliament, will at least be understood when they view any new monetary reform as another possible "red herring" for the purpose of drawing the people off the track. The truth of the matter is that labour is not fully paid for service rendered, and the pages of Hansard will show that, at least, some of those who are to-day advocating monetary reform have already recorded their votes in Parliament in favour of wage reductions, while a number of those ontside Parliament with similar views' are notorious for their opposition to Labour. VIC. JOHNSON.