MONETARY INQUIRY

Evening Post, Issue 56, 7 March 1934, Page 14

MONETARY INQUIRY

■■ TWO FURTHER SCHEMES I WAGE CUTS OPPOSED Two further currency and banking . schemes were placed before the Par- .; liamentary Monetary Committee yes- *; terday afternoon. Mr. William Seddon claimed that his scheme would liberate the country from ;* the - present. financial embarrassment, ■ together with creating avenues of employment (social services) to all eligible ; in lieu of their marketable values of consuming powers. He suggested that ~; the social services of the people be classified in their respective groups, ; viz., primary, secondary, transport, and commercial, that a currency be ] , determined on a percentage basis for • each group, all articles of production possess a life term being assessed ae- . cordingly, the productive value to be i xepaid over the estimated useful life '■'• o£ the article in question to the. State credit guarantee, and the utility values ; of labour to be determined upon the t excess costs of special educational ; training and articles, and tools of trade • are in accordance with their respective j;se values. ;) ' Mr. F. "W. Moore said that they must ; *. get away from the idea that the Great "War was the cause of their economic depression. " That was wrong. The cause was the abuse of credit and then the restriction of credit in New York in. 1929. The bad example set by America was copied by most other countries, including New Zealand when the' 20-per-cent. cut. was made and ■yyheii thousands of men were discharged from public works, thereby Tedueing aid. restricting the spending power of all citizens,tand automatically throwing thousands of pthdr workers out of employment. A great mistake was made t>y most-people ty thinking that gold was the only wealth in the country; eveiythiri'g-itt the form of materialised labour, was wealth. His proposal was to''borrow £10,000,000 by bank'overdraft; or Treasury, bills, re-employ. 50,000 man on 'all: kinds of necessary public Trorks, roads, bridges, drainage, building, and maintenance of all kinds, at £4 per ■week. These men, spending this money would reabsorb the balance of the unemployed, about 30,000, back into their ordinary vocations at an average of • £i per week. A wage tax of 10 per cent, would return £1,600,000 and re- .:.' store the 20-per-cent. cut to all citizens. A wage tax on those people of 10 per cent, would produce about £9,000,000, so that the loan and interest would be more than'provided for / the first year. The good cycle goingiround \ would continue by its own-impetus.>lf 1 lot the wage tax could be retained at 5 per cent., or 10 per cent. That would keep all people employed. The extra . spending -power would'give the peopk ; the opportunity to purchase their usua: : amenities. That would: also mean a .-.. large increase in importation, result- . ing in improved returns from Customs revenue. The increased importations ' would, mean more employment for the workers in Great Britain, enabling then ;* to purchase more of New Zealand's ex •• ports at a satisfactory price to. the Dominion .producers. The increased and imprpyed trading conditions hen would^inein : increased returns fron ' all soilrces-for the Government. "Th'< Government would receive interest anc rents from the many thousands oi ■': tenants who could pay nothing, largei xeturns from income tax, etc. Tin ; sales tax could be withdrawn. CTJTS POLICY A MISTAKE. .V "So far as the cuts were concerned V rou think they were a mistake?" askec pie Hon. W. Downie Stewart.

Mr. Moore: The whole policy was aj mistake. Mr. Stewart: If you were running a business which was not paying, and | there were two alternatives, to impose a cut' or dismiss men, which would you do1? j Mr. Moore: I would impose a cut. j Mr. Stewart: You think, then, that ■the Government should adopt a different policy? Mr. Moore: The Government has Uio position, in its own hands. It is in a j position to enable its employees to ex- j change 'then' services with those of their , fellows. I Mr. Stewart: You think that the Gov- j eminent is never justified in reducing wages ? "I would not go as far as that," said Mr. Moore. He added that the Government was in a position to keep up the standard of living. ,< Mr. Stewart:. You have no great j opinion of economists? Mr. Moore: I don't want to detract from anybody, but we have been ad- j vised by economists for fi^e years, and' to- my knowledge no economist has come j forward with a constructive iuea. Mr. Stewart: Some of the famous economists of the world have been, put-1 ting forward a-scheme similar to yours. Mi-. Keynes" has been advocating a bold policy of public works. Mr. Mooro said that a New Zealander who was at Ottawa had stated that tho economists there had.not come forward with a constructive idea. Mr. Stewart asked" the witness whether he was aware that the British Government had endeavoured to carry out a works policy involving £100,000,000, but had abandoned the scheme as it was not helping them to solve their troubles. Mr. Moore: It did not attempt to create a sinking fund. 'Mr. Stewart: Is that an essential part of your scheme? Mr. Moore: Yes.