THE ATTACK OPENS

Evening Star, Issue 21220, 29 September 1932, Page 5

THE ATTACK OPENS

LABOUR'S NO-CONFIDENCE MOTION CURRENCY BASED OH PRODUCTION ADVOCATED [Pbr United Press Association.] WELLINGTON, September 28. When the debate on the Address-in-Reply was resumed in the House of Representatives this afternoon the Leader of the Opposition (Mr H. E. Holland) moved his motion of no confidence. Mr Holland at once launched an attack against the Government’s unemployment policy, and asserted that many hundreds of men had been withdrawn from tho staffs of tho Railways Department and other public undertakings and put on to unproductive work such as cutting gorse and blackberries. In the meantime, through the staffs not being kept up to strength, the repair work in the Railways Department was falling behind, and tho country would eventually lose heavily. Mr Holland estimated that there were not fewer than 120,000 unemployed (counting men, women, and boys) in New Zealand at tho present time, and these people could and should be set to work on undertakings of value to the people of the dominion. A Labour Government would at once take steps to transfer men from uneconomic to economic undertakings. There was a necessity for a vigorous public works policy on projects of value, such as main and secondary highways and road access to the backblocks. ,

Tho construction of economic railways should bo resumed, Mr Holland asserted, even if it involved taking back the power that had been given to the Railways Board. It was a ridiculous policy to give a not very capable board the right to say to the Government; “ You have no power to enter upon a policy of railway construction unless you get our consent first.” There was room, Mr Holland said, for the greater development of primary industries, and in this connection he expressed regret that steps had not yet been taken to secure definite trade agreements with other countries in order to increase the market for the dominion’s exports. The day for tinkering with tariffs was long past. Ho did not wish to refer in detail to Ottawa until Mr Coates had presented his report, but everyone must know the great danger that was threatening the secondary industries. Mr Holland urged a greater development of the secondary industries. The dominion, he said, should import no goods that could be produced here in sufficient quantities and on an economic basis. He would not bother with tariffs; he would s; inform overseas countries that New Zealand did not propose to import goods which she herself could produce on the lines he had indicated.

Mr Coates: Irrespective of cost ? Mr Holland: No, because a responsible Government would take steps to prevent an abuse of that description. Continuing, Mr Holland said that New Zealand would have to devote more attention- to the Homo market than it had done in tho past. The purchasing power of the people should be increased, and one step in this direction should be an increase in pensions.

- Referring to currency reform, Mr Holland said the country’s problem was tof distribute the goods that were produced, and the fact that people were starving in the midst of plenty proved that the present system of distribution was stupid and inefficient. The true wealth of the country was in what it produced, and the Labour Party would support establishing a central bank to control the currency. The State could produce money just as the banks could produce it. This would not cause inflation, because it would merely be a case of manufacturing credit backed by wealth produced by the country. He quoted at length from works by banking authorities, and said that Russia had a currency regulated by the volume of production. The Labour Party would regulate the price level, and would increase currency and credit as production increased. The purchasing power of any country was the purchasing power of the masses, and if tho earnings of the masses increased the purchasing power would also increase. MINISTER REPLIES. Tho Minister of Lands (Hon. E. A. Ransom), who is also Acting Minister of Transport, replied to Mr Holland’s reference to railway construction. He said that no one would suggest that the construction of a railway of economic value to the dominion should be stopped. The Railway Board’s recommendations had been actuated by the fact that certain projects wore not economically sound, and unless it ciould be shown to the satisfaction of the board that a resumption of the work would be economically sound it was not desirable that it should be proceeded with.

The Leader of the Opposition had advocated increasing the workers’ purchasing power, but the Minister asked how this was to bo done along the Ijnes suggested without increasing taxation. Tho purchasing power of the country was not a matter of currency alone; it depended on the commercial value of the goods the country produced. He was quite in agreement with the view that currency should be brought into line with the value of production, and any conference which would achieve this result would be doing a great service to the world. It was plain, however, that the currency problem could not be solved in any one country.

Continuing, Mr Ransom said the land was the source of the wealth of the

dominion, and it was the duty of the Government to do all it could for the people on the land. He believed that what was being done to bring about more intensive production was tho best tiling to do at the present time. Ottawa had proved that New Zealand could not stand alone either in trade or currency. Trade within the Empire was a good thing, but it was not sufficient in itself, and other markets would have to bo developed. In 1929 tho foreign imports into New Zealand were valued at nearly £16,000,000, while only between £2,000,000 and £3,000,000 worth of New Zealand’s goods went to those countries. However, those countries needed our primary produce, and an effort to secure a place in their markets should be made. A Labour Member: How does that fit in with tho Ottawa Conference? Mr Ransom said the securing of new markets would not interfere with the Ottawa agreements, because the dominions had no right to expect that Great Britain would or could always absorb the whole of what the dominions could produce. OTHER SPEAKERS. Conf-int ing the debate when the House resumed in the evening, Mr W. E. Dairy (Auckland Central) supported the views expressed by the Leader of the Opposition. On the subject of currency he asked what objection coaid be raised to the issue of one pound in currency for every one pound’s worth of goods produced in the country? The Minister of Labour (Hon. A. Hamilton): You are speaking of a selfcontained country. Mr Parry: I am speaking of New Zealand as it is to-day. Continuing, Mr Parry said the position throughout the world was that there was plenty of everything except money. T.aere was an abundance of goods of all inds, and a remedy could only be found by providing people with money to buy those goods. Mr H. S. S. Kyle (Riccarton) criticised the renewal of the contract for school test books. He said the department should have its own copyright and should have the books printed by public tender. He asked what business firm would renew an uuexpired contract on a falling market? If the Minister tried that principle in business he would soon be out of business. Continuing, Mr Kyle condemned tho action of the Government in giving the portfolio of Education to a member of the Upper House. Ho declared that so long as a system existed which permitted this there could be no true democracy in the dominion. He had been asked in Christchurch what he would do if a vote were taken on the subject, and he had declared that he was willing to stand by his convictions and “ vote him out.”

Mr W. Nash (Hutt) said that while he did not wish to belittle the difficulties which the Government bad to face, he believed that the Prime Minister had done more than any other individual to destroy confidence in the country’s finances. He was satisfied that the country could be carried on without waiting for conditions to improve overseas. Mr A. D. M'Leod (Wairarapa) said that some world solution of the monetary problem must be found, otherwise civilisation would be in danger of collapsing. A cure could not be found in a small country like New Zealand. Lie quoted figures to show the fall in the value of the exportable primary products of New Zealand, despite an increase in volume. The total drop over three years, he said, was £27,000,000, of which £25,000,000 related to wool, meat, and dairy products. He asked how any local handling of the currency could meet that position. Mr J. A. Lee (Grey Lynn) said there was no hope of a rise in prices in New Zealand while the spending power of the people of Britain continued to shrink. One of the first essentials to economic recovery in the dominion, he maintained, was a fixed price in terms of New Zealand currency for the pioduce of the farms.

Mr W. A. Bodkin said the day of high tariff walls for the protection of the dominion manufacturers was gone, and if the manufacturers wore to survive they would have to scrap their antiquated machinery and modernise their factories. He claimed that the best method of doing away with unemployment was to settle men on small farms, because the men in the best position to-day were those on small areas which wore' not over-capitalised. Mr C. L. Carr (Timaru) contended that the.greatest problem in New Zealand to-day was the domestic problem. He had no wish to dispute the seriousness of the world problem, but there was the strongest demand for us to face the local issue. The debate was adjourned on the motion of Mr A. J. Murdoch (Marsden).