Evening Post. THURSDAY, JUNE 11, 1936. A SOCIALIST FRAMEWORK

Evening Post, Volume CXXI, Issue 137, 11 June 1936, Page 8

Evening Post. THURSDAY, JUNE 11, 1936. A SOCIALIST FRAMEWORK

When Labour's success at the J General Election was known leading members of the party gave two assur- ( ancei: one, coming principally from the leader, Mr. Savage, th3t there would be no drastic action, and the ' other from the more impatient and impulsive of his colleagues, that no time would be lost in giving effect , to the party programme. In the four j months preceding the session Mr. Savage's pace and policy were fol- ; lowed. Administrative Measures ' were taken to afford interim relief ( to the unemployed and some boards | were warned of the running shoes intended for them; but it appeared 1 that there was a prospect of fulfil- ; ment of the Prime Minister's early : suggestion that it might not be necessary to change the constitution of [ the Reserve Bank or the Mortgage Corporation. In the eleven weeks' session of Parliament now ending a 1 complete change has come over the scene. Gradualness, so far as legislation is concerned, has been abandoned —absolutely and unmistakably —for a substantial instalment of "Socialism in our time." So quickly that many of the public are unaware of the change, the legislative framework of the economic structure has been subjected to drastic reconstruction. The Parliamentary machine has worked with the irresistible force of an overwhelming majority supported, when resistance from the Opposition became at all stubborn, by the power of the closure. The speed has made effective protest from outside impossible with major measures. We doubt if, even now, some of the interests mainly concerned j realise what may result from eleven weeks' law-making. We cannot review the work of the session, but we may briefly catalogue the principal measures. The Reserve Bank has been changed from State-and-shareholder control to complete State control and its powers and the possible Government use of those powers have been extended to include full authority over exchange and over the use of overseas funds, unlimited authority to control credits in New Zealand by increasing the reserve deposits required from the trading banks, power to finance guaranteed-price operations, or to issue credit for Government works or finance general Government activities. The Mortgage Corporation (now the State Advances Corporation) has also been brought completely under State control with unlimited power to borrow under State guarantee and authority to lend without either statutory restriction (when the Government will guarantee part of the loan) or the restriction formerly imposed by failure of the market to provide new capital (since the Government can subscribe for the bonds). The guaranteedprice policy has been launched for dairy produce under legislation which places no definite and calculable check upon the price that may be pafd or the loss that may be sustained by the Government if the cost is not covered by sales. The Railways Board has been abolished and the safeguard provided by its independent authority against the construction of uneconomic railways has gone with it. Final authority for the regulation of transport has been vested in the Minister of Transport, and complete control of unemployment measures has been given to the Minister of Labour. Three major industrial measures have been placed upon the Statute Book: the Arbitration Amendment Act (restoring compulsory arbitration, and'introducing the basic wage, compulsory unionism, and the forty-hour week) and the Factories and Shops and Offices Amendment Acts (reducing hours and permissible overtime and raising minimum wages). Finally there have been 4he Fair Rents Act and the Broadcasting Bill (making the Government "master of publicity").

The catalogue would be impressive even if it were not supplemented by administrative measures taken with authority already possessed by the Government or yet to be obtained. Such measures include a $17,000,000 three-year public works programme, substantially-increased sustenance, and relief work rates, price-fixing for wheat, flour, bread, and petrol involving incidentally % check upon new flour-milling and petrol-retailing establishments. The broad result of Parliament's eleven weeks' work is that the Government has taken powers under which it can control public and private credit, rule the lending market, control the marketing of one important group of products, and if it wishes, institute inflation. We do not suggest that these things will be done. We have the explicit assurance of the Minister of Finance that some of the powers are intended for use only in an emergency. Nevertheless, the power is there. The question of greatest public moment is now: how will it be exercised? If it is used with caution and moderation, with the application of safeguards, and with vigilant examination of the results it will be possible to check harm before it has gone far. But for some of the measures the safeguards which arfe admittedly necessary have not yet been provided. The Government acknowledges that the benefits of guaranteed prices may be

capitalised in the land unless effective steps are taken to prevent this, and it proposes a mortgage adjustment measure which may be preventive, but we cannot judge its effectiveness until it appears. Loan expansion for housing and farming may lead to higher costs and specula-' tion, and, in our opinion, the checks already provided may be inadequate. Reduced hours and higher wages will add to the costs of industries. Protection has been promised, but we do not know yet what form it will take or what its ultimate cost to the consuming public will be. Public works are to be expanded, presumably with part of the cost found from credit issues. The Minister of Finance claims that this will not have an inflationary tendency if assets are created. But Governments in the past have spent money without creating assets of equal value, and this Government, zealous as it may be, cannot expect to avoid all the mistakes of its predecessors. At present everything depends on administration. Tne fate of the Government and the • welfare of the country will be decided by the wisdom and prudence displayed in making use of the legislation which has been passed. The* Government can point to the record of the session and say with justice that it has done, legislatively, all that its followers could expect of it in the time. It has certainly done all that the most convinced Socialist could desire. It has gone ahead with all speed with the whole of its programme, claiming that it received from the electors a mandate to do everything posed. But it is much open to question, despite the political"fiction regarding mandates, whether the country, though it elected the Government with a great majority, approved everything the Labour Party proposed. We believe that many electors voted for Labour just to have a change of Government, others to obtain greater relief from unemployment, others to try an experiment in credit control, others to secure restoration of wage cuts and shorter hours, and others again hoping foxsome benefit from guaranteed prices. The combined effect of the support given for various reasons gave the majority; but if the Government interprets that as a vote for Socialism in our time it will be grievously mistaken. With greatest toleration and calmness the people are watching the experiments made. They will not condemn hastily. But New Zealand is not socialistic. The public want practical benefits and do not want to pay excessively for them. Already, we believe, the Government has gone far ahead of public opinion in its legislation. It remains to be seen whether it can and will apply the brake in operating that legislation. The radical members of the party have set the pace in making the laws. Can the moderates now regain control to direct administration?