MR SAVAGE’S ADDRESS

Press, Volume LXXIV, Issue 22518, 28 September 1938, Page 12

MR SAVAGE’S ADDRESS

Attitude to Financial Institutions

“ECONOMIC SECURITY WANTED FOR PEOPLE ”

Great Crowd at King Edward Barracks

The objective of the Labour Party In its control of the credit of the country was stated by the Prime Minister, the Rt. Hon. M. J. Savage, last evening, as being the provision, first, of adequate money to finance production, and, second, the provision of enough money in the hands of the public to consume the goods produced. No country could be prosperous, he said, when these two factors were out of harmony. The control of credit definitely did not mean that the banks and other financial agencies were to be taken over in a night. The Govomaww* first demanded service, and where that was provided, it did not propose to assume the troubles of those providing it.

Mr Savage spoke in King- Edward Barracks to a crowd estimated at upwards of *»00. Seating accommodation had been arranged foe 4500, and a very large section of the audience had to stand. Mr Savage was given an attentive and enthusiastic hearing throughout his speech, and on entering and leaving was cheered, heartily. A loud-speaker system enabled tt»e Pri«» Minirier to talk without rtrain.

The Mayor, Mr R. M. Macfarlaac, who prerfded, said that the meeting wm the largest political gathering ever held in Christchurch.

Mr Savage s#id that he had never had so large an audience, and, to say the least, it was an inspiration. An influential deputation had approached him before the meeting with the request that he should define the Labour Party’s attitude toward Socialism, said Mr Savage, The editors apparently were running out of subjects, and he had therefore been asked to say something about banking and the policy of Labour on that SubjectLabour believed that there were two fundamentals In the financial system of a prosperous country—that money must be provided lor production, and that money must be provided for consumption. Unless a country could buy what it produced, trade expansion was impossible. “Economic Freedom" The Prime Minister said that he was one who believed that unless the Government of a country controlled the credit of the country, it could not control anything else. “I don’t suggest'that this means socialisation,” said Mr Savage. “I am not prepared to predict what will happen to the money system in this or any other country at any long period ahead, but I do believe that there can be no freedom unless the mass of the people have freedom to buy, and that is economic freedom. Without economic freedom no nation can ever be free.” The clear objective of the Labour Party, said Mr Savage, was to make money the servant of man. instead of the master. During its history, money had taken many forms, but they had generally been forms that had little or no relation to the necessities of the people. As he had Said at the Imperial Conference, New Zealand was Setting out to base its' economy on goods and services and not On something that had no relation at times to the 1 needs of the people. - "Some of my friends in the banks, the newspapers, and the Chambers of Commerce want to know what we mean by the control of credit,” said Mr Savage, “I want them to know that it certainly does not mean the control of all the banks. What we want is service, and we don’t care where it comer from. Our objective is to get service from all sections of the community, from banks, insurance companies, stock and station agencies, and aU the others We want to 'make the lives of the people worth while. I told Lord Balfour of Burleigh When he came to see me, that what we wanted was service, and if we got it from private concerns there was no reason- why we should share their worries in giving that service. Let them carry their own worries. If, they did not give service, I told him, fWe wtmld provide it ourselves.” Finance for Producers Another banker. Sir John Davldsoh, asked what the Government wanted. He was told that What the Government wanted was to get money into the hands of tire people, and advances to those. in industry who needed them.' The. Government did not want the banks on the eve Of ah election to tell their clients that their overdrafts Would have to be reduced. The Government wanted to see enough money in the hands of the producers to enable them to produce to the full capacity, *nd, second, enough money in the hands of the consumers to buy what was pror duced.

Mr Savage said that he was not so stupid that he believed that all the wool, meat, and butter that was produced in this country could be consumed here, but unless money was made available, the people could not buy the goods and services that were exchanged for that produce. In this, it seemed that the Government should have some control, and indeed it did have some control through the banking legislation of the present' Government.

During the war, said Mr Savage, alterations in the credit system had allowed the nation to finance its war expenditure. The banks apparently in those days could do things that they had not been able to do before, arid had not done again since. If it was possible to make 'the nation’s credit available for war services, what made something of that Sort Wong for the carrying oft of the social and other services of the country? The country would have to do better in the future with its financial schemes. If the banking corporations would not do it, the Government would have to do it. .The banking corporations in New Zealand were doing better during the last two years than they had before, as the ratio of advances to deposits would show. The banks were not doing badly, but it was necessary to have some uniformity. It was useless to have the country swimming in money one year and in the midst of a slump the next. Slumps and booms Were regarded as phenomena of the trade cycle, but trade cycles were man made, and could be smoothed out by seeing that there was, first, enough money for production, and, second, enough money in the hands of the people to buy that production. "The Last Say” “Again, I say the isshes are too great to be left In the hands of private individuals. I am hot suggesting that private individuals should not serve, but that the last sav in the control and issue of money should be through the elected representatives of the people of New Zealand. I am not anxious to share the worries of the stock and statloil agent. I Would place him In the safiie category as a distributor in the commercial world. The stock and station agent is doing the wOrk we would have to do if he was not there. As long as the thing is running smoothly a 13d he is doing the job, why should I worry? “But it was not a substantial reply to tell those whose overdrafts were being called in and were leaving the farms after a greater part of their lives, that their position was dua to “spots Ofi th* sun.’

He wanted to end tbat sort of thing and to give - greater security. He did not suggest that' the stock and station firms or the banking corporations should not be the judges of whether the security offered was good or bad, but the nation, through its selected representatives, had a responsibility as WelL

“And I want to assure nay good friends in the stock and station agencies and in the banking corporations, that I have enough worries to-day, with Continental affairs and local affairs, without . butting into . their affairs at all\if they will only do the job. But if they don’t do the job, we will do it for them. That is as plain as I can state it. No SoclaHmHon of Shops More security was Wanted right through every stratum of society, said the Prime Minister. Any nationalisaSon of the small shopkeepers would be ie maddest proposition imaginable for this or any other Government. The Internal Marketing Department was set up to stabilise internal prices, after the farmers had been given a guaranteed price and better selling arrangements in London. Labour did not want the people to be bankrupt one part of the year and booming for the other part. They wanted the best service that could be given. The shopkeepers knew that their businesses were prosperous to-day, because of the increased buying power of the "I want the buying power of the people to be expanded as production increases. What is the use of expanding production unless the wages of the small earners and all incomes are lifted at the same rate? What is the use of increasing the value of production unless wages and income ate increased at the same time? I am fairly spfe in that statement, but I do want to say that since Labour took office we have -not solved’all the problems facing the people of New Zealand —not by any stretch of the imagination. When I say we have not gone half the way or half the journey, the leader Writer immediately says: "There you are. That is quite clear. Mr Savage means fay that the whole of the way in- the socialisation of the means of production, distribution, and exchange/ I suppose we are going'somewhere, for we have had vast changes since I was a lad.” National Party Manifesto , The National Party’s manifesto was described by Mr Savage as the equal of a “condemned man’s repentance.” He could imagine “these fellows,” after, having spent years piling up their sins against society, making repentance in the face of a terrible risk of being sent to kingdom come. The National Patty—the “same old gang"—stood convicted of destroying the usefulness of the conciliation and arbitration system; of creating an army of unemployed—the number rose from 51,000 after the forming of the Coalition to 79,000 in 1933, and was still at 58,000 after they bad applied a cure for four years; of destroying the public works policy; of destroyifag apprenticeship contracts; of banishing the five-year-olds from the schools; of destroying the State Advances Department and replacing It with a Mortgage Corporation seml-pri-vately controlled; of extending the life of Parliament, and of discharging hundreds from the public service, and interfering with their superannuation rights, ’ The Nationalists charged Labour with increasing taxation. While aggregate taxation collected had increased by £11,000,000 since 1936, the national income had risen by £45,000,000. The balance was in favour of the taxpayers. It was not a bad deal. He would plead guilty right away to having set out deliberately to increase the national, income, because the foundation of all trade was the buying power of the people. The graduated land tax was reintroduced, and a small change was made in the incidence of income tax to bring in something additional. The Leader of the Opposition said Labour dearly loved to spend money. It dearly loved getting money to spend and in making provision for the day that the people were not able to earn it. The Labour Patty was accused of fin intention to destroy religion, said hit Savage, but chriousiy enough the Labour Party had more clergymen in its ranks than had any other party. It was Said before the last election that the Post Office Savings Bank was to be taken over, with all the people’s savings; but this, and the other predictions of disaster made by the National Party, had so far failed to materialise. . „ The idea that actuated the Government was simply to see that there was some security for industry and business. and some security for the people ui the evening of their lives. Mr Savage said that the reduction of costs aimed at by the National Party could not be accomplished without a reduction in wages or pensions. It was impossible to reduce taxation and at the same time keep the pensions services at their present level. It was wrong to say that the Social Security Bill had been hacked about before it was made law, because every item in the original proposals made had been incorporated in the act. The Leader of the Opposition said that the country should not assume the responsibility of the Social Security scheme, but when the bill was before the House, the Opposition had not voted against it. When the scheme was before the special committee, the Opposition members had not done anything to show Where the scheme was wrpng, but had attempted to drag out evidence to show that there was nothing good in it at all. The act would come ihto force next year, providing for increased pensions in many directions, and if the Opposition assumed power and as it threatened, did not put the provisions of the act into force, it would thereby cut pensions. Mr Savage then gave details of the provisions of the bill, which he Said had been grossly misrepresented by ’OftMtolilda tos«ak«Mt Bm wanted to

make tt perfectly plain tha* Ae bor ©r gtel between 16 and 3D, who wat not earning would not toe required to pay. They would contribute according to their earnings when they were to work, and there were special benefit in the bill for them whether they contributed or not. . „ _ “We have the nucleus m the Security Bill and we are going to build on i ff said Mr Savage. Replying to the charge that Labour intended to socialise the medical profession, he said that Labour asked the profession to make an agreement with the Government to administer the act. He was satisfied that the great bulk of the pro- • fession had never been paid for the service given.and that the medical .men would co-operate with the Government. He wanted to give the young people a greater measure of freedom. He defiled any intention of the Government to destroy the friendly societies. It- wanted to build them up, although the National Party could not be convinced of that if he talked till he was black in the face., “Our job is to put people on the land.” -he said. “Our predecessors drove them off.”* The charge of confiscation of land by Labour was made, yet the Government had granted 1700 freehold titles. Labour’s job was to acquire land in large areas not fully :; developed and make it available, in a productive state, to those who had little money. The statement that Labour was out to confiscate the land was contrary to fact, he could tell them. . Labour aimed to give the farmers ■ security so that the land could be handed down to their heirs and successors. The Hon. D. G. Sullivan had endeavoured, ■ before he was a Minister,- to -secure: Governmentassistance ’ to de- ~ velop secondary.industries. vNew Zealand could not have a bigger population without increased production,- and Mr Sullivan was attempting to build up a new life for the secondary industries. Mr Sullivan had made the railways worth while and had moaernised methods and raised the wages of the men. “We have to raise the wages of men doing the job, not only in the public service, but in all walks of life, said Mr Savage, who claimed, amidst.applause, that Labour had done more in three years than any other Government had achieved. : Mr J; Roberts (president of the North Canterbury Labour Represent** tion Committee) moved, and Mr E. J. ; Howard, M.P., seconded: ‘That this meeting of Christchurch citizens expresses its appreciation of ; the statesmanlike address of fbe Prim* Minister and also its sincere thank* to - him and the Parliamentary Labour Party lor their splendid achievement* on behalf of the people of New Ze»land. It also pledges itself to dft tk utmost to return the Government ’-to the forthcoming General Election." •' - The motion was carried With it roar of approval. One “No” was heard from the side of the platform, and ws*.. greeted with a chorus of hoots- - Cheers were given for, the PrfaW Minister and the audience sang “Rt He’s a Jolly Good Fellow.” The checking was renewed when Mr Savage left . the barracks and he drove awuy. through lines* of enthusiastic soor porters. ■ (Other election news Is printed to . Page 16.)