SOCIAL CREDIT MOVEMENT

Evening Star, Issue 21715, 9 May 1934, Page 1

SOCIAL CREDIT MOVEMENT

LECTURE BY MR R. M’DONALD v With the aid of charts compiled from the New Zealand Year Book, Mill. M'Donald explained the A plus B theorem Douglas analysis in the Theosophical Hall last evening. /■ Supporters of the Social Credit Movement contend that under the present conditions the purchasing power in the hands of the community is chronically insufficient to buy the whole product of industry. 'This is because the money required to finance capital production, and created by the banks for that purpose, is regarded as borrowed from them, and therefore, .n order that it may be repaid, it is charged into the price of consumers’ goods. It is a vital fallacy to treat new money thus created by the banks as a repayable loan, without crediting the community, ou the strength of whose resources the money was created, with the value of the resulting new capital resources. This has given rise to a defective system of national loan accountancy, resulting in the reduction of tlie community to a condition of perpetual scarcity, and bringing them face to face with the alternatives of widespread . unemployment of mini and machines, as at present, or of international complications arising from the struggle for foreign markets. The Douglas Social Credit proposals would remedy this defect by increasing the purchasing power in the hands of the community to an amount sufficient to provide effective demand lor the whole product of industry. 'Phis, of course, cannot be done by the orthodox method of creating tuny money, prevalent during Hie war, which necessarily gives rise to tlie “ vicious spiral ” of increased currency, higher prices, higher wages, higher costs, still higher prices, and so on. 'The essentials of the scheme are the simultaneous creation of new money and tlie regulation of the price of consumers’ goods at their real cost of production (as distinct from their apparent financial cost under the present system). The technique for effecting this is described in Major Douglas s books.