RECONSTRUCTION

Evening Post, Volume CI, Issue 150, 25 June 1921, Page 6

RECONSTRUCTION

LABOUR'S PROPOSALS .. \

REPLY BY , SIR FRANCIS BELL.

A meeting of trades unionists was held at Auckland recently to consider problems of economic reconstruction and unemployment, and a report of .the meeting and the resolutions adopted were forwarded to v the acting Prime Minister. The report stated that the present financial stringency was due largely to the amount of capital t and loan money which had been diverted from development work to! war services, with the effect of inflating the prices of the necessaries of life, as well as adding a huge amount to. the Annual Interest Bill. The difficulties to be faced in this respect would be folly appreciated when it was known that approximately fifty-two million pounds of loans fell due during the five, years ending 1925, and must be either redeemed or renewed. The renewal of these loans, and the continuance of the borrowing policy -—especially at the present extortionate rates of interest —must end in national financial disaster, unless relieved by a further levy, in addition to the present proposal, 'for the purpose of at least paying off tne debt incurred for war purposes; thus relieving , industry and the community generally from ever-in-creasing and recurring taxes, as well as the grave risk of payment of debts at a time when money was considerably more, valuable than when the loans were floated. ' )

In view of the fact that the present position was due solely to war conditions out of, which the private wealth of New Zealand had been increased by approximately 200 millions (a, conservative estimate) above the normal increase, the only equitable system of finance upon which reconstruction' could be carried on, was one that would provide ■■ the necessary capital from sources which had an abnormal benefit due to war conditions, and over that will not impose any further burden of interest upon the com?nunity or unnecessary tax upon those engaged ill industry. To this end it was the duty of the Government to impose a levy upon accumulated wealth, such levy to be,on a graduated plan, with an exemption of, say, £3000, and to return at least £15,000,000 for immediate development of hydro-electric power, land settlement, and houses for the people. :

The report concluded by advocating that Parliament should meet immediately to pass legislation to give effect to the proposals, and that to meet the immediate necessity of relieving unemployment the money available from the surplus of £6,000,000 shown in the published statement of the finances of the Dominion should be used for carrying out authorised public works, advances to local bodies, and the erection of workers' dwellings. All work, whether of a relief character or otherwise, to be paid for at trade union rates of wages.

Sir Francis Bell has replied as follows: "I am in receipt of your letter of the 2nd instant. I have considered the preamble and resolutions covered by. your letter, and am unable to advise the Government to recommend Parliament to adopt the financial methods outlined. I dissent from every statement in the preamble which sets forth the reasons for the resolutions. I trust your council will agree with me that if those statements are incorrect the reasons founded on the statements are consequently invalid, and the resolutions misleading."