Banks and Credit

Dominion, Volume 28, Issue 210, 3 June 1935, Page 11

Banks and Credit

Sir—The deductions of ’’What Next” may appeal to those given to reading thrillers; they do not to students of reality. Does your correspondent imagine that any hireling of the monetary system would d’are to expose the weaknesses of the present economic system which entered its death struggle way back in the early stages of last century, when a new factor was added to industry—power ? _ “What Next” surely cannot question the logic of this view? Has it ever occurred to him? Apparently not, for instead of admitting this to be the case, he attempts to discredit the writings of certain authorities who, pledged to the cause of humanity, and not to that of vested interests, have made out a splendid case for monetary reform. They could accomplish their object were it not for the obstruction that they encounter at the hands of the inert, gullible public, and those who would rather “wait and see. Where does the profit come in from the sale of their books, if “What Next” is typical of the material they have to work on? No, Sir, these gentlemen do not write “best sellers.” They are amateurs, and hence victims of the spites and jealousies of professionalism. It is the amateurs who have led the world, and they will lead it again. Orthodoxy has another think coming. If “What Next” doubts the power of the money monopoly, let him digest the following quotations:— Gladstone in one of his addresses is stated in Morley’s life of this statesman to have said: “From the time I took office as Chancellor of the Exchequer I began to learn that the State held in the face of the bank and the city an essentially false position as to finance. . . . The'hinge of the whole situation was this: the Government itself was not to be a subordinate power in matters of finance, but was to leave the money power supreme and unquestioned. In the conditions of that situation I was reluctant to acquiesce, and I began to fight against it by self-assertion from the first. . . I was tenaciously opposed by the Governor and Deputy-Governor of the bank, who had seats in Parliament, and I had the city for an antagonist on almost every occasion.” Coming to our own times, waiting to the Johannesburg “Star,” September 12, 1924, Mr. Lloyd George, when dealing with the Dawes Scheme, which the international financiers forced the German Government at that tinie to adopt, said: “That agreement would never have been reached without the brusque, and brutal intervention, of international finance. The protocol that was signed on Saturday last is the triumph of the international financier. He swept statesmen, politicians, priests and journalists, all on. one .side and issued his orders with the imperiousness of an absolute monarch who knew there was no appeal from his ruthless decrees.” “What Next” has missed the point anyway. Nobodv blames tlie banks for our troubles—at 'least no broad-minded person does —but many people to-day deplore the fact that democracy has been so foolish as to permit a self-interested, self-sufficient private monopoly to minister to the needs of industry. Of all services money is the most vital and the most personal. To all of us the control of that service is beyond our power. The banking system falls short of its .requirements because the tokens which it issues are linked with gflld or goldibneked currencies, which rarely if ever, reflect tlie sole purpose of money, which is to distribute goods with tlie minimum of interference. Money has thus become a commodity in wliieli the banker deals for profit. When lie has made a good deal he can afford to be generous to the public. Th|s is when and where he unloosens the credit strings. His policy is rule of thumb and unscientific, viz., that he can issue credit up to ten and twelve times the limit of his gold holdings. To this system our New Zealand trading banks are part and parcel, the Central Reserve Bank being, it seems, a vassal state of the central domain of finance lodged partly in Threadneedle Street and partly in Wall Street. We want something different. What is more, we shall have it. Under our present banking laws we have lost, control of our credit, and when a nation loses that it loses its freedom. What then. Sir. is the use of Parliamentary elections, ftb this political turmoil to elect a Government that is powerless to protect the people who elects it? Democracy is farce !-I am. etc.. DE , POSIr . Pahiatua, May 29.