DOUGLAS SOCIAL CREDIT

Hawera Star, Volume LIV, 18 September 1934, Page 7

DOUGLAS SOCIAL CREDIT

PLAN FOR NEW ZEALAND

DISCOUNT TO PURCHASERS

COLONEL CLOSET'S ADDRES

Various aspects of a scheme to raise the purchasing, power of New Zealand consumers in an endeavour to lessen the gap between purchasing power and rising production, were dealt with t>y Colonel S. J. E. Olosey, MX'., V.D., in the course of an address, “The Douglas Social Credit Plan for Now Zealand,” at Hawera last night. Mr H. J. Finlay, president of the South Taranaki district council of the Douglas Social Credit Movement, presided. and there was a good attendance. - ', -■ - - ■ ' ■ ■ ’ . ‘ '

After, he had briefly outlined; the factors' which ’ had actuated Major Douglas to formulate his analysis, Colonel Closey referred to the treatment •which had been meted out to him by the Monetary Commission. Major Douglas was a man who had been asked by give evidence before the leading economists of the day, and yet his ability as a speaker and his mannerism had been adversely criticised and; the. more important aspects of his analysis glossed over. Major Douglas had no proposal to offer as far as New Zealand was concerned; continued the speaker. What the movement was attempting to do was to place the defects of the prc•sent monetary system before the public. The present depression had occurred because of a breakdown in the present system, said' Colonel Closey in quoting, authorities in support of this opinion. , This breakdown was chiefly caused by a monopoly which certain institutions enjoyed ov e r credit. A survey made in 1929 showed that gold coin or other “real” money amounted to only .7 per cent, of the currency of the United Kingdom. The Douglas movement stated that the credit system could be created by the nation, equally as well as by the banks, using as the basis real wealth in the form of food, clothing and other commodities produced by man.

In dealing with the procedure which would be followed should a scheme, propounded by the speaker, be adopted in New Zealand, Colonel Closey said that a committee of nine, re presenting various classes of the community, would be appointed. This committee would he known as the National Credit Authority. All commodities were produced to be consumed, and if . there was not sufficient money to purchase the surplus of goods, more money should he handed out to the consumers: In the case of the farmer, he would be handed hack the value of his production to New Zealand. This ■would mean, on.present prices, in the case of butterfat, a return of Is 3d and in the case of crossbred wool 10d to Is a lb. In the case of other sections of the community, a list would be advertised of articles subject to a. discount which would bring the price to a ‘just price” level. The Douglas movement maintained that by'injecting the money over the counter, the lubricant, would, be applied at the right' spot and the. monetary machinery would be able to move freely.

• It had been stated that there was no shortage of purchasing power, continued Colonel Closev. There were ample fixed deposits in the banks. This money in the banks was not available to the working man, but were savings which would be used in production at a future date. The difference between production costs and purchasing power had been fixed in New Zealand at , £7.000,000. The movement was not in favour of inflation such as had been experienced by Germany after the Great War. If. this £7,000,000 was placed in the hands of the consumer, harmful inflation would not follow as there was a plenitude of produced goods. In Germany there had been no such surplus; production was almost at a standstill. Any money system had to bo based on goods and services.

In reply to a questioner who enquired whether flip £7.000,000 placed in the hands of the consumer would, at the end of the first year, bring about a state of progressive inflation. Colonel Closev stated that this sum would be used in the payment of debts. No inflation would result because of this concellation. This was one of the basic principles of theDouglas system. In reply to other questioners. Colonel Closev said that, under the DoueBns svstem, tariffs would automatically wipe themselves out. By an increase in purchasing power, more goods would -be imported which would in turn, mean more exnorts. Gradually, the situation would right itself. Ho was not in favour of controlled immigration in cancellation of debts, at the present stage, because there was sufficient unemployment and con-, 'sequent distress .in New Zealand. This would be accentuated bv immigration He would, however, bo in favour of the scheme-, after New Zealand bad its bouse in order and bad consolidated prices.

A vote of thanks to the‘speaker was carried bv acclamation.