Evening Post FRIDAY, AUGUST 11, 1939. "ON TO SOCIALISM"

Evening Post, Volume CXXVIII, Issue 36, 11 August 1939, Page 8

Evening Post FRIDAY, AUGUST 11, 1939. "ON TO SOCIALISM"

"They could retire and consolidate forces, and then advance again to go on to Socialism, which was the objective of the Labour Party." This frank declaration by Mr. C. Morgan Williams, Government member for Kaiapoi, cannot be dismissed as a little*indiscretion by a Labour advo-. cate who thinks the time for softpedalling is past. It is' a logical statement of the end and aim of the campaign against money to which the Leader of the Opposition has i drawn attention, Mr. J. A. Lee's violent attack is lite most notable recent move in that campaign, but it does not" stand alone. The abuse of "financial gangsters" and "financial dictators," though probably intended in part to cover up the Government's financial mismanagement, all fits into this campaign. Mr. Morgan Williams's statement reveals both the method and the aim, the strategy and the objective, of the attack. The raising of an internal loan at over 4 per cent., Mr. Morgan Williams said, was a definite retrograde step by the Labour Party. However, .in time of war a retreat might be an absolute necessity, as a prelude to a consolidation of the forces and a counter-attack to victory. That had been done financially in Russia, and if interest rates ruling at the present time were for the purpose of consolidating forces for counterattacking, that was all to the good. They could retire and consolidate forces, and then advance again to go on to Socialism, which was the objective of the Labour Party. The damaging effect of such statements upon the credit and confidence of the country can scarcely be overstated. A few months ago possessors of savings were invited by the Government to lend those savings to the Government. Only a fortnight ago the Budget announced the preparation of a National Small Savings scheme. Now a responsible member of the Government party declares that the raising of the loan was a retrograde step, and that the Government should reverse the policy involved in this use qfr savings at interest just as soon as it feels strong enough to do so. Is this likely to persuade people to lend, and to provide the capital of which the Government stands in need? Is it calculated to induce capital to come here and stay here, except under compulsion? Contrast Mr. Morgan Williams's declaration with the statement made to the Labour Conference by the Minister of Finance at Easter. Mr. Nash claimed that the use of credit and the expansion of spending were justified under certain circumstances. But he added: Now the position is different. A saving from people's actual income is necessary to counteract a possible danger of prices rising and as a basis for capital expansion. .. . For saving now, that is, withholding expenditure now to enable our people to enjoy more in the future and to avoid, price increases now, there is an unanswerable case. That is, we in New Zealand have to finance our own development. Expanding industry in New Zealand depends on the people of New Zealand and the people of New Zealand have to provide the capital for the building up of New Zealand. Saving is futile unless the capital is used, and, as the possessor ,of savings is often unable to use them himself, lending them to some person, company, or authority is the next and essential step. Thus we have debt in its many forms, but every debt is balanced by a credit. Companies, individuals, local bodies, and Governments pay interest; but individuals receive it in interest, in life insurance policies, in dividends, and other forms. If debt is to be destroyed, then the income from savings and the savings themselves must be destroyed also. Some who rail against debt and interest make exceptions of small savings in the Post Office Savings Bank and investments in homes. But ultimately there can be no exceptions. Moreover, destruction of property held in the form of loans to some other person or authority must lead inevitably to abrogation of all private property rights. If it is said that A shall not be allowed to retain his share in a public utility (in the form of stock in a municipal loan), then B cannot be allowed to retain his share in a private farm because that share takes the form of a mortgage—which is C's debt. But, then, how much longer will C's title to the farm, or the house or other property hold good? Loans and debts are a method of distributing property rights, just as much as shares and company capital. Destruction of the system cannot take place without destruction of the property rights. The attack on the system of borrowing and lending is but the first step in the attack on private property, but this may be deferred till the attacking forces are consolidated. The country should be grateful to. Mr. Morgan Williams,

therefore, for his revealing declaration that, though there may be strategic retreats and orthodox loans it is intended to "go on to Socialism, which was the objective of the Labour Party."