“CURSE OF PLENTY”

Hawera Star, Volume LI, 24 May 1932, Page 2

“CURSE OF PLENTY”

CURRENCY REFORM SPEECH captain RUSH WORTH AT Auckland PUBLIC MEETING DEMANDS INQUIRY The framing and adoption of a new monetary system for New: Zealand urged by Mr H. M. Rush worth, M.P. for Bay of Islands, m an address to a lai'oe audience in the Auckland Town HaTl last week under the auspices or the. Farmers’ Union and the Country Party. The meeting adopted a resolution recommending that a tribunal, with a Supreme Court Judge as chairman, be set up to devise such a system. Mr Rush worth, who had named his address “The Summer of Our Discontents,”, received an ovation at the close. New Zealand’s many present troubles of which unemployment was the most obvious were only symptoms, of sickness affecting the whole body politic, said Mr Rushworth. It was useless to treat the symptoms as separate diseases ; the basic trouble must be truly diagnosed. The speaker w r ent on to detail gluts of commodities in many parts of the world, such as wheat iu Canada, coffee in Brazil, cotton, oil and manufactured goods in the United States, and rubber in the East Indies. Everywhere, he said, there was a surplus of nearly all that the heart of man could desire, yet not a single industry outside Russia was working to capacity.

WRONG REMEDY CLAIMED Humanity was suffering under a curse of plenty, the very converse of its older trouble, which had been shortage of the things man needed most. Yet the leaders of to-day said, “Consume less and produce more.” It was easy to see why they gave such advice ; they were applying the medicine devised for the ills, of yesteryear, those caused by famine, plague, pestilence, and war. It was not true to say that these were responsible for the present trouble. The remedy proposed would only make matters worse instead of better. Mr Ru-shwortlh then devoted some time to quoting many notable authorities in support of the proposition that the world’s only lack was an adequate supply of currency. He had grown accustomed, he said, to the type criticism which applied to a man the labels “inflationist”, and “repudiationist,” as if no middle course were possible. To judge from the utterances of his critics, one would think 1 that increasing the volume of money was inflation.

DEFINITION OF “INFLATION” Against this he would cite a statement published last February in a bulletin of He National City Bank of New York. The bank stated that “inflation” was a word of confused usage and many meanings. In employing it, the use to which money was put . must be considered. When the amount of money in circulation was in excess of trade needs, and the surplus was. circulating and being used to bid up prices to fictitious levels, then, and then only, the bank declared, did inflation exist. Summing up his authorities, Mr Rushwprth said they gave what appeared to be a true; diagnosis, of the trouble. What was the remedy ? For convenience he would state it for the moment with reference' to New Zealand alone.

Two main courses were available to the Dominion. One was to squeeze the • national requirements and organisation into a deficient and shrinking monetary system. This wa,s the course that had been and was still being taken. It was popularly summed-up in the phrase “equality of sacrifice.” There were many objections to such a policy, and perhaps the most important was that it was practically impossible to carry out. Pursued to a logical conclusion, it would destroy the sanctity of contracts, without which the social organism must fall to pieces. ENLARGED SYSTEM WANTED. The other course was to fit the monetary system to the national requirements. This had lately been done in Sweden by putting the system upon a

price-index basis, and now, whatever happened outside that country was assured that its own monetary system would be safe and intact. The ideal monetary system would be an international one, and, failing that, one covering the British Empire. In each case, however, the difficult problem of control arose. Who could be entrusted with the task? He hoped that New Zealand’s representatives at the Ottawa Conference would not return with a recommendation that New Zealand should submit to monetary control bv anv independent outside authority. "However, if New Zealand wished she could take the matter in hand and make a monetary system to meet her own requirements. The essentials of such a system, m his view, were as follows: Cl) It must remain under the control of the people as a whole; (2) it inust have a form and foundation to which the people were accustomed; (3) it must be as stable as any otner standard measuring instrument or device ; (4) it must be anchored to prevent inflation as defined by the authority he had quoted earlier, namely, a general rise in prices; (5) it must meet the legitimate requirements of trade and industry generally, not penalising any section of the community; (6) it should he such as to stimulate efforts to meet our overseas liabilities.

INVESTIGATION SUPPORTED. The speaker referred to various monetary schemes put forvvard by Mr A. N. Field and other Neit Zealand writers, and said that one could easily he framed to combine the best fetures of all. The people whom he represented were prepared to discuss any scheme. Reverting to the title of his address, “The Summer of Our Discontents,” Mr. Rushworth issued a warning that if present conditions prevailed for long and if sabotage, such as the destruction of surplus wheat, cotton and coffee were ‘allowed to continue, the problem would "Decorne one of scarcity as of yore, and the summer would be followed by winter. “We can, we must, we will prevent that,” he declared. The speaker concluded with an appeal for hopeful and courageous action. ; The following motion, proposed by Sir George Richardson, who said that |lie did so simply as a private citizen, was carried by acclamation: “This mass meeting of citizens of Auckland strongly urges the setting np of a tribunal, presided over by a Supreme Court judge, to hold a full, open, and immediate inquiry into the operation of the New. Zealand monetry system and possible alternatives to that system, with a view to its re-inflation to a point, and in such a fashion as will provide restitution to those who had been despoiled, will meet the legitimate requirements of trade, commerce, and industry, and will provide maximum stimulus in the effort to meet our overseas obligations.”