CURRENCY ISSUE

Feilding Star, Volume 10, Issue 3997, 11 April 1933, Page 7

CURRENCY ISSUE

LABOUR PARTY’S POLICY MR HOLLAND EXPOUND^ During 1 the course of his address m the Majestic Tiieair, last, night, the Leader of tli Labour Party. Mr H. E. l, land, said Ins party did no stand for inflation, but. for stabilisation. Increases in credit did not constitute inflation if they were accompanied by corresponding 1 increases in th value of production. Cnderta' ings in New Zealand could be financed without involving heavy interest commitments at all. There was no shortage of money in New Zealand and the legal tender currency in existence was just the same as before the slump. Deflation had slowed down the velocity of circulation and that was the equivolent of taking l a large amount of money off the market altogther. Slowing down

industrial processes slowed down the transfer of credits by cheques, which functioned ,-well when industry was galvanised up to its full capacity. There was no way out of the difficulty of increasing the money in circulation except by a restoration of purchasing power. Were there another war, the wheels of industry would soon be revolving at full speed. Everything that can be done in the stress of war we can do in the stress of Peace. There is a greater peed to-dav to save men. women and children from stnr-

ail ion and poverty in tbe midst of actual and potential plenty. Great development work bad been carried out in Russia bv infernal finances and exchanges of imports and exports. He did not. suggest that New Zealand should follow Russia in everything, hut Russia certainly had taught the world a lesson in the organisation of social credit, which was fundamentally more important than currency. A nation’s credit rested on the goods and services produced by r the people. Currency reform was not only inevitable, hut indispensable, and would constitute an important part of rehabilitation. Tbe first step necessary in currency reform was tbe establishment of a State Oentr >1 Reserve Bank, with the sole right of note issue. The ner f step was the nationalisation of banking interests. Under existin''. legislation tbe Labour Partv. if in power, could declare a state of emergency, take over the banks and make them serve the People. That was a power which the present Government had overlooked and never intended to leave on the Statute Book.