The Evening Star THURSDAY, JANUARY 25, 1934. “MEET MAJOR DOUGLAS.”

Evening Star, Issue 21628, 25 January 1934, Page 8

The Evening Star THURSDAY, JANUARY 25, 1934. “MEET MAJOR DOUGLAS.”

The Mayor of Auckland has taken up a very sensible attitude over Major Douglas’s visit to New Zealand. A deputation of the “ faithful ” waited on him and asked that their “ Martin Luther ’/ ho tendered a civic reception. Mr Hutchison said “ No,” but said it very nicely. In his private capacity he hopes to meet Major Douglas, but not garbed in the robes of office and the mayoral chain, and presumably not at the Town Hall. A great many people believe, not without reason, that the world is on the eve of fundamental changes in its currency system, in its capitalistic system, in perhaps its basic conception of the distribution of wealth. By no means all those people who. half dread and half desire such a change are cranks. That this is so is more than suggested by the appearance in so level-headed and thoughtful a cpiarterly as the ‘ Round Table ’ of an article entitled ‘ Was Moses Right?’ Moses, as the writer reminds us, forbade the Hebrews to take interest on money lent to one another, though they may take it on money lent to Gentiles, “ who in this as in some other points of his legislation seem to be regarded as lawful prey,” comments the anonymous waiter. He admits the benefits of thrift and the necessity of some inducement to practise it, but he distinguishes between an accumulation of goods and an accumulation of a claim on goods—i.e., credits. But in these days of safeguarded production, whether by irrigation, rust and drought-resisting cereals, and artificial fertilisers, plus a highly-developed world transport system by land and by sea, the problem concerning saving is not what it was in Moses’s day. “ Our problem is not to provide food for hungry mouths, but to find hungry mouths for the food which we have—or rather to get the food to the mouths.” And, in the sphere of manufacture, instead of a law of diminishing returns, there seems to be a law of increasing returns, due in part to the substitution of the machine for human labour. In fact, we now have to consider whether “ thrift ” needs repression rather than encouragement; and if that be the case the practice of giving and taking in-

terest would be no longer required on public grounds. The difficulty into which the world has now got itself is that savings, having learned to expect their prerogative rent, called interest, lie idle if they cannot get it. So goods fail to circulate and then tend to fail to bo produced for want of a circulating medium. Having thus lessened purchasing power, excessive saving reduces business activity. It is a rather serious charge against the existing system as now exemplified that the current rate of interest sought is higher than reproductive works will yield except when business is most active. Hints of the magnitude of idle capital in the world to-day are gleaned from cabled news of the flight from the dollar, or from the pound, or from the franc. Panicky financiers are continually shifting their hoards from one country to another according to their ideas of the relative safety of this place or that. Much capital has gone on strike because it demands higher interest than business or taxation can bear.

A remedy is urgently wanted for all this. Chasing one’s own tail is perhaps a satisfactory occupation for kittens, but not for a world teeming with unemployed. Therefore we see many great minds preoccupied with the conviction that capital’s excessive expectations of interest are more responsible than sunspots are for weather like our present ‘‘ summer,” for the periodic convulsions which shake the modern economic world. They do not necessarily propound dogmatically some revolutionary theory of finance or' suggest immediate abolition of interest. But they mostly do think that burden should be diminished, and they see little prospect of this happening so long as wo rely implicitly on a financial system and dogmas based on theories which obviously do not suit existing world conditions. When we search for leadership towards the evolution of a better system wo naturally gravitate towards one who has an intimate working knowledge of the existing system—one who is able to distinguish between the good and the bad in it, and who in rebuilding a new system will utilise the good material and discard the bad. Has Major Douglas any such knowledge? The examinations to which he has submitted himself in person to various bodies of examiners in various countries emphatically suggest that he has not. There is no need to elaborate the point, for we have drawn attention to it before, the latest occasion being the review of a scathing book by a Sydney accountant, Mr F. J. Docker. Incidentally, the Douglasites intensely dislike accountants. Professor Belshaw in his pamphlet ‘ The Douglas Fallacy ’ quotes among the opponents of ,the Major such names as Sidney Webb, G. D. H. Cole, Dr Hugh Dalton, J. A. Hobson, and R. H. Tawney, all of whom are extremely severe critics of modern capitalism and of capitalist financial institutions. At the risk of offending many sincere and estimable persons here we regret that the Mayor of Dunedin did not act similarly to the Mayor of Auckland in the matter of a civic reception.