The Evening Star TUESDAY, NOVEMBER 24, 1931. MR DOWNIE STEWART.

Evening Star, Issue 20958, 24 November 1931, Page 10

The Evening Star TUESDAY, NOVEMBER 24, 1931. MR DOWNIE STEWART.

We presume that Mr W. Downio Stewart would not he offended if we were to term him now a veteran in politics. He entered the House of Representatives at an earlier age than did most members, and he has had an unbroken political career—except when on active service during the Great War—with a specially large proportion of it in Ministerial office. 'That he is again a member of Cabinet is largely due to his own efforts as well as to his ability and experience, for he played a leading part on the Reform side in bringing the two anti-Socialist parties' together in the Coalition. It is perhaps hardly necessary to ask the electors of Dunedin We'st what the Coalition Cabinet would lose in tho 1931-34 Parliament if by some incomprehensible contretemps Mr Stewart were unseated on Wednesday of next week. The bulk of tho rest of New Zealand would owe Dunedin West a grudge should its voters decide; “ Not this man, but -—, one of the other two candidates.” .In passing, it may bo mentioned that each of those other two has views on finance diametrically opposed to those held by Mr Stewart. His are orthodox, sound, and tried. Because of this, and because of his long period at the Treasury, during which ho added habitual study and research to the daily routine of actual administration, no one is better qualified to answer Mr Holland on. tho question of finance. This Mr Stewart did last night with conspicuous success. At the same time lie metaphorically killed two other birds with tho same stone, for his immediate opponents aro both in tho Holland arithmetic class and of tho Holland currency cult. If they have tho time and inclination to read Mr Stewart on finance they will surely find it most disconcerting to their, campaigns. The lucidity with’ which Mr Stewart interpreted Mr Holland, is such that we make no apology for appropriating hero a few extracts from his speech: Even tho Labour Party said in one part of their manifesto that a halt must be called to further taxationhut he did not know how they reconciled this with the statement immediately following, that the source from which taxation was drawn must be extended and tho national income increased, nor did he know how they reconciled it with their policy of further expenditure all, round and a restoration of tho cuts. These statements were mutually destructive. They suppressed the fact .that such (mornious extra burdens had already boon imposed on the higher incomes that they would find it impossible to increase these. They quoted entirely misleading figures to suggest that recent increases in income tax had hit tho small man higher than the big man. He had corrected these mis- . statements again and again in the House, hut for election purposes .they

ignored the explanation and repeated their fallacies. In another part 'of their manifesto they declared that credit was the first essential and that Labour would raise tho money. No explanation was offered as to what they meant by credit or who was refusing to release credit. They proposed a State bank under political control of the note issue. If the electors realised what this meant they would reject the Labour policy on this ground alone. Everyone would remember that when the banks crashed in tho ’nineties they had been blamed on all hands because they had made credit too easy. Now they were being cursed because -it was claimed that they refused to release imaginary credits. As a matter of fact, after much talk about releasing credits, creating fiduciary issues for millions, and so on, tho politicians had found it wise to fall back on the banks for help, and this had been furnished almost without limit. The banks had been the mainstay of tho country ever since tho Commonwealth credit had disappeared in London in 15)29. They had done marvels in spite of the abuse and vituperation heaped on them by the politicians. No, one, of course, would bo so simple as to imagine that the banks are doing all this without reimbursement for their services. They are acting purely in the way of business, and not as philanthropists. But when business is transacted between two parties each likes to be convinced that the other is acting in tho accepted business-like way. The State—that is, the Government —has been in close contact with the banks over a prolonged critical period, and it is because of the New Zealand Government’s honesty of purpose and straightforward dealing that there has been a minimupi of friction with the banks as compared with what has taken place in Australia. The dominion may congratulate herself that Mr Holland was not in power from 1928 onwards. His programme blazons forth that he would tax so heavily in certain directions that inevitably capital would flee tho country with express speed. Mr Holland would then replace tho deficiency by means of obtaining credits without stint. But, as Mr Stewart asks, where would he get credit on behalf of a country denuded of the bulk of its capital? There occur times when an extension of credits is vital to a country. It is almost a pity that ouo of those in the Ministry at tho time would not inform the country how during an earlier period of this year only the opportune securing of credit from Homo enabled the Treasury to meet the monthly payment of public servants without at least serious qualms. The crisis was overcome without inflation, and therp is now a widespread belief that New Zealand’s recovery will bo sure, if slow. We cannot do better than* again quote Mr Stewart in conclusion: The Labour Party in New Zealand would disclaim any intention to resort to' inflation, and they agreed that the Budget must bo balanced. But tne inevitable result of their policy to refuse all economies, to restore wages cuts, to incroose expenditure, to borrow £25000,000 toe alleged reproductive works must be to produce larger anil larger deficits from which the descent to inflation was unavoidable and disastrous.