CREDIT CONTROL

Evening Post, Volume CXX, Issue 111, 6 November 1935, Page 10

CREDIT CONTROL

LABOUR'S POLICY

STATED BY LEADER

BANKERS TO OPERATE

Labour's plan for dealing with the money problem—State control of currency and credit —wjs dealt with by the Leader of the Labour Party (Mr. M. J. Savage), when he opened the Opposition's national campaign in the Town Hall last evening. The money system under Labour's rule would be operated as it was now, by people who knew something of the business of banking, said Mr. Savage. Labour said the money service should be sufficient to enable the people to purchase at economic prices the full value of the Dominion's total production, said Mr. Savage. Unless that was provided the people could buy only at uneconomic prices. The result was industrial depression and unemployment. "To provide an alternative to the present system, Labour says that the public credit should be controlled for the people by a national credit authority whose duty it would be to provide a money service sufficient to give efiect to the will of Parliament," he said. "The money necessary to complete capital works must be raised by one of the following means—taxation, borrowing, or an intelligent use of the public credit. NO MORE TAXATION. "Further taxation is out of the question. Borrowing means debt in perpetuity, which has already reached unmanageable proportions; while the intelligent control and use of currency and credit would not involve the country in debt in perpetuity and would not necessarily involve the Dominion in the taking over of the Associated Banks, but would provide a money service at cost. Labour's policy is State control of currency and credit. "Ministers and the Press want to know just how the money system is to operate tinder Labour rule. The answer is that it will be operated" then the same as it is operated now: by people who know something of the business of banking. "When the Coalition Government went to thD polls in 1931 asking for a blank cheque they did not even supply a policy in broad outline, let alone supply details. They asked for and were granted the right to adopt any methods that seemed to be desirable in dealing with unforeseen circumstances. When Labour rules it will be the duty of the Law Drafting Office and Treasury, just as it is now, to express, in the necessary legislation, the financial policy of the Government. MEDIUM OF EXCHANGE. ''One thing will be clear to the student—that the goods and services which are to be exchanged, and the medium of exchange (purchasing power) must be brought into more direct and sympathetic relationship to each other. Unless purchasing power is sufficient to equate production—at economic prices —industrial development and higher standards of life will soon come to an. end." Mr. Savage said that the system they were working under at present could not be imagined anywhere else but inside a mental hospital. The Editor ?h VtJ^Xf 11"15 Post"had r;g ht]y saw that the Reserve Bank had been set up for the purpose of controlling the credit of New Zealand. Labour's job was to see that the Reserve Bank did • 3?u\ 1 news PaPers were insisting that the Labour Party should give details of what it was going to do "I don't know whether they expect me I s ?y whether the five-pound notes should be red or green," said Mr. Savage. "My job is to understand something of the economics of banking I think I do understand something about that. I am here for the sake of trvmg to serve you and incidentally serve coming generations. If I can do that I will be ready to die. (Cheers.) Tho people who are asking for details are the same people who in 1931 wrote leading articles asking for a blankcheque for the Coalition Government. The Reserve Bank has got to be made a State bank, and the directors of the «™ W, L aYe t0 be tho representaYof, °f «»« P«>Ple of New Zealand. You can call it a Reserve Bank or a national credit authority. Call it what you hke. The Editor of 'The Post' can call it any old name he likes "