DOUGLAS CREDIT

Evening Star, Issue 22194, 23 November 1935, Page 11

DOUGLAS CREDIT

BRITISH LABOUR PARTY'S VIEW / An analysis of the Douglas “Social Credit ” .scheme, from the> Socialist viewpoint is : contained in a twopenny booklet issued by the Labour Party, . (states ‘ Public ; Opinion ’ -of October 4). >lt is a report prepared by a subcommittee, consisting .of Messrs* E. F,Durbin, Hugh Gaitskell, and W. R. Hiskett, and its conclusions have been' accepted by the National Executive Committee of the Labour Party. The authors state:— “ Irregularity of the flow of money is due to the fact that both industry and the banks are in private hands.. The issue of social credit offers no way of dealing with this problem, as the banks are to remain in private hands, and industry is to continue to borrow, from the banks. No suggestion is made by Major Douglas as to how the excessive issue of bank credit to industry is to bo prevented. As a method of expansion, social credit may have something to bo said for it. As a matter of stabilising full .production it offers no constructive suggestions. “There are immense administrative difficulties in the proposal to control prices and grant social credits everywhere in proportion to price reductions. When the immense range of qualities in nearly all consumption goods is remembered, it will be seen that the task of ascertaining that the correct price reduction had, in fact, taken place before social credits were granted would be virtually an administrative impossibility. The temptation for the retailer to have, it both ways, to charge the higher price and collect the credit, would be extremely strong. Without some form of nationalisation before hand effective checks could not be imposed. “ We therefore conclude that, whil* the granting of social credits—assuming favourable political conditions—would tend to cause monetary and industrial expansion, the proposals would create certain serious banking problems, and offer in any case no permanent cure for the recurring capitalist depression. The hope that they would achieve permanent prosperity is entirely vain. Moreover, in their usual form of a universal price discount for all industries, they involve administrative difficulties of an almost insuperable character.” ,