MONETARY REFORM.

Auckland Star, Volume LXV, Issue 208, 3 September 1934, Page 6

MONETARY REFORM.

My letter of August 24 has forced your correspondent R. Grose in your issue of August 29 to recede from his dogmatic assertion of August 21 that he automatically endorses the Douglas analysis which asserts that "the purchasing power of the community is increasingly insufficient to buy the whole product of industry." In an attempt to divert attention from this volte face ho draws several rpd herrings across the scent; the last of which in particular clearly shows that he has not made a genuine attempt to understand the real implications of the nine points elaborated in my letter of August 24, viz., the oversea origin of so many of our present troubles. In view of this, Mr. Grose's assurance (on ibehalf of both himself and Mr. Power) of willingness diligently to study proposals alternative to Douglasism for remedying the defects of the present conditions will scarcely carry conviction. In any case, I would suggest that something more is required, viz., a will to study expert criticisms of all proposals advanced to remedy our present troubles and a disinclination to' accept uncritically any scheme big with promise merely on the principle that "present conditions are not right — anything else is worth a trial." It is clear from internal evidence in Mr. Grose's letter and in the letters of others who have attempted to "butt in" on this correspondence that they have little or no first-hand acquaintance with the criticisms by experts of Major Douglas' views or with other literature on the depression emanating from non-Douglas sources. The official views of the London Chamber are set/ forth in full in the July, 1932, issue of its journal, and have been republished verbatim in this country by the Canterbury Chamber of Commerce —surely no protagonist of the Douglas doctrines. The analysis of the present troubles in'that report is divided into five parts, which may bo summarised as follows: (1) A falling off in purchasing power directly through currency contraction since 1920; (2) changes in the price level through lack of nutomatieity in the gold standard when gold is withdrawn by one country. (3) tariffs, quotas and exchange restrictions; (4) emergence of a serious transfer problem on account of tho growth of war debts and reparation payments: (5) failure to face up to the question of the cancellation or reduction of these debts. Surely these march with the nine points listed by me rather than- with the A plus B theorem. E. P. NEALE.