CONTROL OF CREDIT

Evening Post, Volume CXXVI, Issue 77, 28 September 1938, Page 21

CONTROL OF CREDIT

LABOUR'S POLICY

OUTLINE BY MR. SAVAGE

AH) TO PROSPERITY

(By Telegraph—-Press Association.)

CHRISTCHURCH, Sept. 27.

The objective of the Labour Party 3n its control of the credit of the country was stated by the Prime Minister (the Rt Hon. M. J. Savage), this evening, as being the provision first of adequate money to finance production, and, secondly, the provision of enough money in the hands of the public to consume goods produced. No country could be prosperous, he said, when these two factors were out of harmony. Control of icredit definitely did not mean that banks and other financial agencies were to be taken over In a night The Government first demanded service and where that was provided it did not propose to assume the troubles of those providing it. Mr. Savage spoke in the King Edward Barracks to a crowd of about 8000. Seating accommodation had been arranged for 4500, and a very large section of the audience had to stand. Mr. Savage was given an attentive and enthusiastic hearing throughout his speech, and, on entering and leaving, was cheered heartily. A loud-speaker system enabled the Prime Minister to talk without strain. The Mayor, Mr. R. M. Macfarlane, who presided, said that the meeting was ■Hie largest political gathering ever held in Christchurch. Mr. Savage said that he had never had so large an audience, and, to say the least, it was an inspiration. An influential deputation had approached him before the meeting with a request that he should define the Labour Party's attitude towards Socialism, said Mr. Savage. The editors apparently were running out of subjects, *and he had therefore been asked to say something about banking and the policy of Labour on that subject. v TWO FUNDAMENTALS. Labour believed that there were two fundamentals in the financial system of a prosperous country—that money must be provided for production, and"ffiat;tnoney-tnust be provided for consumption. Unless the country could buy what is produced, trade expansion was impossible. The Prime Minister said that he was one who believed that unless the Government of a country controlled the credit of the country it could not control anything else. :' • "I dont; suggest that this means socialisation;" said Mr. Savage. "I am not prepared-to predict what will happen to the money system in this or any other country at any long period ahead, but.l do believe that there can be no freedom unless .the mass of the people has the freedom to buy, and that economic freedom. Without economic freedom no nation can ever be free." The clear objective of the Labour Party, said Mr. Savage, was to make money the servant of man instead of his master. ' . "Some of my friends in the banks, the newspapers, and chambers of commerce want to know what we mean by the control of credit," said Mr. Savage. "I want them to know that it certainly does not snean- control of all the banks. What we want is service, and we don't care where it conies from. Our objective is to get service from all sections of the community, from banks, insurance companies, stock and station agencies, and all others. We want to make the lives of the people worth while." Mr. Savage said that he was not so Stupid that he believed that all the wool, meat, and butter that was produced in this country could be consumed here, but unless money was made available people could not buy goods and services that were exchanged for that produce. In this ft seemed that the Government should have some control and indeed it did have some control through the banking legislation of the present Government. During the war, said Mr. Savage, alterations in the credit system had allowed the nation to finance its war expenditure. The banks, apparently, in those days could do things that they had not been able to do before and had not done again since. If it was possible to make a nation's credit available for war services, what made something ofs that sort wrong for the carrying on of the social and other services of a country? The country will have to do better in the future with its financial schemes. If the banking corporations would not do it, the Government would have to do it. The banking corporations in New Zealand were doing uetter during the last two years than they had before, as the ratio of advances to deposits would show. The banks were not doing badly, but it was necessary to have some t uniformity. It was useless to have a country swimming in money one year and in the midst of a slump the next Slumps and booms were regarded as phenomena of the trade cycle, but trade cycles were man-made and could be smoothed out. If he wanted to help industry the proper place to begin, it seemed to him, was to lift the purchasing power of the "fellow down below." THE LAST SAY. It was just as necessary for the nation to be the sole authority for the issue and control of money as it was for it to be the sole authority for the organisation and control of the army and navy. Even if they were agreed that the money system was not as good as it should be, it was necessary for the free life of industry and the welfare of the community. "Again I say the issues are too great to be left in the hands of private individuals. I am not suggesting that private individuals should not serve, out that the last say in the control and issue of money should be through the elected representatives of the people of New Zealand.

"The stock and station agent is doing the work we should have to do if he was not there As long as the thing is running smoothly and he is doing the job, why should I worry?" More security was wanted right through every strata of society, said the Prime Minister. Any nationalisation of small shopkeepers would be the maddest proposition imagine vie for this or any other Government. The shopkeepers knew that their businesses were prosperous today because of the increased buying.

•1 want the buying power of the people to be expanded as production increases. What is the use of expanding production unless the wages of small earners and all incomes are lifted at the same rate? What is the use of increasing the value of production unless wages and Income are increased at the same time? I am fairly safe in that statement, but I do want to say that since Labour took office we have not solved all the problems facing the people of New Zealand—not by any stretch of the imagination. When I say we have not gone half the way or half the journey, the leaderwriter Immediately says, "There you are. That is quite clear. Mr. Savage means by that the whole of the way in socialisation of the means of production, distribution, and exchange.' X suppose we are going somewhere, for we have had vast changes since I was a lad." A motion of thanks and confidence was passed and the meeting pledged itself to work for the return of the Government