The Evening Star TUESDAY, FEBRUARY 6, 1934. A MONETARY INQUIRY.

Evening Star, Issue 21638, 6 February 1934, Page 8

The Evening Star TUESDAY, FEBRUARY 6, 1934. A MONETARY INQUIRY.

In appointing a parliamentary committee to consider the present monetary system and possible improvements of. it or substitutes for it, the Prime Minister (Mr Forbes) has honoured one principle that should not be disregarded. That is that the task of governing and devising policies should not be the monopoly of the executive, secure in its control of a majority, but be shared in by the whole of Parliament to the largest possible degree. In the last few years the opposite system has tended to grow, in this and in other countries, to an extent that is not wholly to be condoned on the score of special circumstances. That point was stressed by certain members of the House, when the Public Petitions M to Z Committee last session brought in the recommendation on which the Government has acted. ' Mr Forbes had made it very plain that he did not see how any useful object could be served by the course suggested. The committee, however, was unanimous in its recommendation, which was based upon petitions chiefly signed, we presume, by disciples of the Douglas Credit scheme, but signed by sufficient numbers to make clear that they represented a real element of opinion. Some of them had been before the House for a year. When the committee advised unanimously that a parliamentary select committee should be set up immediately to conduct a full and open inquiry into the present monetary system and possible alternatives thereto, the Government did well in not flouting its recommendation. It has done what the committee and the House, which made no dissent from its report, asked for, but whether any good will come of it beyond the affirmation of a principle is another matter. One or two supporters of the inquiry expressed unbounded hopes as to what could be done by the right kind of correction of “ an eighteenth century monetary machine ” and “ an old world financial order,” Mr Lee, the Labour member for Grey Lynn, going so far in his enthusiasm as to envisage “ a national effort that would lift the country out of its depression in two or three weeks.” Wo do not know whether Mr Lee’s idea of a proper system would agree or not with the Douglas Credit prescription, but sober minds will be content to smile at his ecstatic expectations, as at the gibes against a system which worked at least as well as most other human inventions until an abnormal strain was placed upon it by human folly. It is really

grotesque to suggest that New Zealand can have a monetary system of its own when half its financial problem is made by external debt, and to a unique extent it is dependent for its prosperity on the sale of products abroad. Commissions to inquire into these matters, moreover, and especially into the Douglas Credit notions, have been held before. Major Douglas will presumably bo a witness before this committee, but it is much to be hoped that the members of it will he able to get anything clearer or more practicable from him than the Macmillan Committee at Home, or the Select Committee of the Canadian Parliament before which he appeared, or the economists of the British Labour Party, who considered and rejected his proposals. It is not conducive to usefulness of the new inquiry, moreover, that it is being held after the steps already taken for the formation of a Reserve Bank may be supposed to have fixed this country’s policy for an indefinite time to come. The Government might have gone further in accordance with the principle emphasised by us at the outset if it had asked the parties in Parliament to nominate their own representatives to serve on the committee, instead of choosing them itself. The Leader of the Opposition, Mr Savage, by whom that point has been made, questions whether some of the members chosen ■will have any particular knowledge for dealing with the whole subject, and that doubt will be largely shared. The committee will have the assistance of a secretariat of experts, but it is exports, in this matter, against whom section of opinion has revolted. For all that can be expected from the committee the selection of “ plain, practical men,” which has been made, including some at least who have thought a good deal about the problem, may serve as well as any other.