IF IN POWER.

Auckland Star, Volume LXIV, Issue 252, 25 October 1933, Page 9

IF IN POWER.

LABOUR'S OBJECTS. PRINTING NOTES "NOT ENOUGH." MR. SAVAGE'S CONVICTIONS. (By Telegraph.—Parliamentary Reporter.) WELLINGTON, this day. Although the Labour party stands for nationalisation of banking it would not, 111 the event of its attaining power, attempt to controj the system from the Cabinet room. It would merely lay down a policy and require that the expert bankers carry out that policy. This statement was made in the House by Mr. Savage when he was criticising the Reserve Bank proposals. He asked if it would not be better if the State owned the whole banking system. Mr. Coates had said that the Central Bank would assist in raising prices by providing cheap and ample credit, and that would. control speculation. He asked how much the Federal Reserve Bank system of the United States had controlled speculation. As soon as the Central Bank started to control credit it was going to make it impossible for private banking corporations to continue. Mr. Savage said he could not understand why the State did not control the whole banking system, and then there would be 110 need for the Central Bank at all. The time had come for a complete transformation. He could not understand why there should be any doubt about confidence being placed in the Reserve Bank if all its directors were appointed by the Government. That seemed to him as if members were casting an insult at themselves. Lord Beaverbrook, whom no one could describe as a Labour supporter, had urged the limitation of the powers of banking, and Parliamentary of the system, but if a member of the NewZealand Opposition suggested that he would not be listened to by the Government. London Assets. Replying to Mr. Coates' question as to how credit could be utilised, Mr. Savage said there was only one way to utilise credit to-day, and that was by making it possible for the people to spend it. Ivo one would need credit unless the people had money to buv the things created by that credit. Mr. Coates had referred to the Reserve Bank issuing notes against the sterling assets in London, but he did not see where that was going to lead New Zealand. The bill gave the Government povVei; to issue notes against the £10,000,000 of credit in London. Mr. Coates: We don't do that. The bank does. Mr. Savage: What would happen then? Mr. Coates: The bank would issue the notes to other banks, and retii e the Treasury bills. Mr. Savage: We're just getting to where we started. Mr. Coates: We wouldn't have to pay anv interest on the notes. _ Mr Savage: That is not bad going. It will do me. That is what we provided for during the war. but didn't do. The Government has always been accusing Labour of wanting to print notes, but it seems it is going to fall into line at last. "No Short Cut to Millennium." "I am of that school of thought." Mr. Savasre continued, "which says there is no short cut to the millennium. T don t think that bv turning out more money we will solve the problem. The use of the printing press is not enough. \\e must put money in the hands of the people in sufficient quantity to enable them to buy back the service . they render." Currency must not be substituted for taxation, for no matter what its form it would be a charge on the people eventually. The moment currency was overdone it became taxation in one of the most vicious forms. Unless the State were vested with full power to control the monetary system it would allow the private banks to retain their grip on the system.

If Labour Ruled. It had been "said outside the House that one purpose of the bill was to prevent Labour, if it attained power, from puttin" into force its banking policy, it thai were true then the Government was up the wrong tree, for no Parliament could bind a future Parliament, and when Labour pot in it would institute its policy although the heavens fell.; Mr". E. F. Healy (Coalition United. Wairau): When? Mr. Lee: You won't be here. Mr". Savaga (to Mr. Healy): You have cot a slinnerv hold on your seat. T am not a betting man, but I would be willing to wager you won't be here in the next Parliament. In explaining Labour's, views on controlling the banking system. Mr. Savasre declared that if those in charge of the system did not carry out Labour s policy when directed to do so tiien others would ouicklv he found who would do what they were told. Parliament must be master of the situation.