Douglas Credit System

Dominion, Volume 26, Issue 286, 29 August 1933, Page 11

Douglas Credit System

Sir, —Many times the £2,000,006 Mr. Boocock mentions would be issued yearly and recovered at the same rate, except that the issue would exceed the recall to the small extent necessary to compensate increases in the population or the standard of living, and also to equate a considerable initial increase in saleable production. Mr. Boocock’s reference to Social Credit as the issue of “millions of paper notes” was, as stated, absurd, because he obviously implied an uncompensated increase of the currency unaccompanied bv other regulative measures, which is not Social Credit. Moreover, it might not be necessary to increase the actual note issue, as cheque, money would probably be more convenient, though that is a detail and is open to question. The statement alleged to conflict with “Equity’s” may not have been aptly worded, but was certainly not contradictory. I said in effect that present production is no criterion of what production would be tinder Social Credit. It would be limited,: as it would under a barter economy, solely by the public’s desire to consume or the point at which that desire strained the capacity to produce. Douglasism insists on the following: (1) State issue and recall; (2) The issue to consumers; (3) Equation between saleable production and purchasing power. But regarding details it is flexible. Suppose the consumer-credit issue for a certain period in New Zealand is to be £4O millions. Primary industries and producers add this to their costs, the remainder of which we will suppose are £4O millions paid directly or indirectly to the consumers. They recover in prices, say, £7O millions from secondary industries and middlemen and £lO millions from distributors. That squares them. The secondary industries, etc., have a further £7O millions cost in wages and profit, and recover the total £l4O millions in prices from the distributors. That squares them. The distributors haye paid £lO millions to primary industries and £l4O millions for goods, and have, a £2O million wage and profit bill totalling altogether £l7O millions, which they recover as £l5O millions in prices to the consumer and £2O millions Just Price Subsidy. That squares them. The consumer has had £4O millions, £7O millions, and £2O millions as wages and profit, and with a £2O millions National Dividend gets the total £l5O million he nays for the goods. That squares him. The Credit Authority has paid £4O millions in National Dividend nnd Just Price Subsidy and recovers it from primary industries and producers. The issue balances the recall. The figures, of course, have no actual significance, being simply for illustration. That is not exactly how it would work, but it gives the broad principle, disregarding Government revenue and an infinitude of detail. Personally I prefer a slightly different method of recall. T advise critics to make out a balance-sheet on these figures and prove there is no discrepancy.—l am. etc.. DISTRIBUTION. Wellington. August 26.