MONETARY REFORM

Dominion, Volume 29, Issue 150, 20 March 1936, Page 12

MONETARY REFORM

More Purchasing Power For Consumers ACCOUNTANT’S VIEWS A plea for monetary reform as a solution of economic problems was made by Mr. D. M. Sherwood, a London accountant, in an address to a publicmeeting convened last night by the Douglas Social Credit Movement of New Zealand in Wellington. The creation of more purchasing power, he saU, would enable New Zealand to buy more manufactured goods from England, so that England would be able to buy more primary produce from New Zea laud. Mr. Sherwood said tshe world to-day presented four amazing and damning paradoxes —poverty side by .side with plenty, unemployment side by side with work to be done, politicians frantically trying to make work side, by side with scientists and engineers inventing U hour-saving devices which were putting more men out of work, and nations preparing for war side by side with people earnestly desiring peace. There was enough food in the worlj for everybody, but people w.ere starving or suiciding through poverty. The present system had failed in distribution—the distribution of purchasing power.

In New Zealand there was no excuse for unemployment. He saw that more houses were needed and that existing houses wanted painting ins'-de and out. It was not that the countrylacked materials to build houses or materials to paint houses, but simply that the people lacked the money, with which to build or paint or hire builders and painters. The economic system was moulded on the needs of the days of scarcity. Now. however, tlie scientists and en gineers had produced machines which produced more ami more goods. These machines, however, displaced men who losi their wages, so that there were less wages to buy more goods. Machines had displaced men but there was no distribution of what, in effect, should be machine wages. In a sane society men freed from toil by machines should bo able .to buy the output of the machines and enjoy more leisure. More Purchasing Power. The whole trouble was lack of purchasing power, not necessarily money of itself, but money in the bauds of consumers. Consumers wanted enough money to buy the goods they needed. Economic laws were man-made and should be changed if they did not work satisfactorily. This did not mean “burn the banks and hamstring the bank managers.” It was not proposed to toucli the banks. The banking system did its work well and truly. What it did not do was to finance consumption. There was no logical reason why this should not be done. Money was merely a ticket or token, in some form or other, with which to buygoods. What was wanted was a system which would give enough tickets to buy the goods wanted. That did not mean uncontrolled inflation or inflation at all. i It was merely proposed to equate existing money.: .with existing - stocks and then vary the two directly, from time to time. It was intended that there should be a national credit authority to control internal currency afnd credit, of which the banking system formed a part, and this, credit authority would ascertain if there was a deficiency in purchasing power, and, if so, make it good. How this was done did not greatly matter. It would vary with different countries. In New Zealand it might be advantageous to use money in public works, in paying exporters -an amount in addition lo present prices which would bring their returns up to a fair relationship with their costs, in reimbursing retailers . for articles sold at a just-price discount, confined in the first place to necessities such as food and clothing, in making special provision for the unemployed if there was a lag in their rightful occupations, or iu extensions to pensions schemes. If this were done consumers, having more money, would be able to buy more, stocks would move off the shelves of the retailers, manufacturers would make more, and importers would bring in more goods. If. importers were able to bring in more goods exporters would be able to send more away because the country from which the imports came would be able t buy more. Labour had promised monetary refrm to New Zealand. Every think ing person should consider the matter and help tlie Government. He did not think tlie Government had its method cut and dried. It was probably feel ing its way step by step. The Prime Minister had repeatedly asked the people for help and co-operation and it was up to the people to give that help. Whether a monetary experiment succeeded, however, would depend on the people and the support they gave tlie Government. New Zea land once led the world in social te form and could do so in financial reform. so that she saved herself by her efforts and the world by her example.