MONETARY SYSTEM

Hawke's Bay Tribune, Volume XXII, Issue 153, 14 June 1932, Page 10

MONETARY SYSTEM

CURE FOR ITS FAULTS CORRECTING ECONOMIC CRISIS FARMERS' UNION SPEAKERS The present economic crisis and the advantages of a scheme which, it was claimed, would cure the faults in New Zealand’s monetary system were the subject of two addresses which were given in Napier to about 80 people last night by Captain F. Colbeck, life member of the Auckland Farmers’ Union, and Mr A. E. Robinson, secretary of the Aucklaud provincial executive of the Farmers’ Union. The meeting was presided over uv Mr W. Somerset Smith, who introduced the speakers, Captain Colbeck and Mr Robinson and also Mr R. E. Talbot, president of the Hawke's Bay branch of the Farmers’ Union. The present situation, said Captain Colbeck, was not so much a slump as a disequilebnum of prices. The position was that the secondary industries or New Zealand found that exports were impossible. There was too much of everything m the world due to an excess of production, yet politicians said that more should be produced and less consumed. New Zealand could double its production and it was ridiculous to give men who knew nothing about farming a cow and ten acres, which would have the effect of adding to the overproduction. The evil had been increased by the Government by increasing the customs duties on imports. In New Zealand we had to sell our goods at 80 per cent above world value. As a result of this factories were running at half of capacity and with no profits. It was not possible for the Government to get taxation as blood could not be got out of a stone. “In short,’’ said the speaker, “they are as bankrupt as we are.” DRIFT MUST BE STOPPED. Continuing, Captain Colbeck said that the present state of affairs could not continue and the country was drifting into a very dangerous position despite the fact that there was everything that was wanted in the country. Rather than adopt the slogans: “Produce more and consume less” and “Keep the money m your own country” he said the country should adopt “Let every man have a decent living.” He held that an effort should be made to lower the present high prices. Some might say that if they did so they would be ruined, but he thought that if the present state of affairs was allowed to continue for another 18 months they would be ruined m any case.

The speaker did not hold out muen hope for good coming about from the Ottawa Conference, as last year not much was gained, and this year practically the same men were going there.

“Disaster is iminent, there is no doubt about that.” said Mr Robinson on rising to speak He continued by saying that the world had really not got very far with civilization and there were still possibilities for advancement. There were gluts in the world to-day and the peculiar thing was that one excess would create another excess. There had been a reduction of 25 per cent, since 1929 in the world’s production. Exports were paid for by imports, lie said, and the tendency was to push goods out of the country to pay for those coming in. That was all right, but there was always someone who would be left behind. SOMETHING WRONG. There was something wrong when our ancestors could live successfully in the wilderness, yet with all our cities and improvements there were 50,000 men out of work and their grandchildren were starving. Everyone had the idea rooted into them that they were afraid of scarcity. There was no scarcitv and there was no need Io have fear of it. There was nothing wrong with production, Mr Robinson said, hut as far :.s Now Zealand was concerned there

had been a 50 per cent increase in 10 years with a corresponding increase in exports. The men who were responsible for this were now being kicked off the land. People had been told that there were 85,000 farmers in New Zealanders, but the real position was that there were 51,000. It had also been said that a farmer’s income had decreased by 40 per cent., but this was only the decrease in exports. The difficulties of to-day were really internal and not external and our own making through trade. The matter could be made right through a reduction in costs.

Currency was popular purchasing power and up to 1920 there was an increase in note issue to production, but after that there was the reverse. Currency or notes had no actual value, but they were valuable as they were accepted as such. In New Zealand there was not much option about it, as it had been forced upon the people. Everything in the country had been effected by the issue of money due to the banks’ operations Currency and credit were the cause of the whole trouble, but it had to be remembered that these were not wealth. New Zealand was on the edge of a cliff and her foundations were rotten. New Zealand made its living from the sending out of its raw products and receiving them back in manufactures. When they come back the Government, the merchants, the advertisers and others get a cut at them. PRICES OF PRODUCTS. The scheme which he supported was that the proper thing to do was to increase the price of butterfat and wool to a payable figure and to give free money. Any scheme should be anchored to something and he proposed that it be anchored to production. Things had to be stabilised. It would be an incentive to production, but it would not lead to over-production. All price rises would have to be restricted, giving sufficient purchasing power to the country. The Government would not be able to tinker with the money. Having gained control of the banks, the Government would tell the bank to issue say 6d for every pound of butterfat, produced by a dairy factory. The dairy company would create credits, etc., and the banks could do what they liked with them. Values would be re-estab-lished on the old level. The effect on exchange was then dealt with by Mr Robinson. He suggested that the Government commandeer the goods, send them out of the country, sell them and pay the producers. Costless money would be created, the banks being used as a machine for the purpose. What was really being done was the mobilisation of the country for the ration. If more goods were sent out 50,000 men would be put to work. Nobody would be hurt by the scheme, neither the banks, the farmers, the unemployed, or Britain.

The scheme could no doubt be improved upon and he welcomed criticism, but did not expect it in small detail, Mr Robinson concluded.

At the conclusion of the addresses a very large number of questions wore answered by Captain Colbeck and Mr Robinson, and at the conclusion they were accorded a hearty vote of thanks.