MONETARY INQUIRY

Hawke's Bay Tribune, Volume XXIV, Issue 63, 24 February 1934, Page 7

MONETARY INQUIRY

MAJOR DOUGLAS HEARD Defects in Present Systems COMPREHENSIVE PROPOSALS

(By Telegraph—Press Association.) WELLINGTON, Feb. 24. A special meeting of the Parliamentary Monetary Committee was held to-day to hear evidence from Major Douglas, founder of the Douglas Credit Movement. When he was first invited to appear

before the committee with a proposal or definite scheme which might be made applicable to New Zealand. Major Douglas pointed out that owing to inescapable commitments he wag obliged to leave Wellington ut an early date, but suggested that the judicial inquiry into the current monetary system on behalf of the Now Zealand Government might suitably be held in London. He asked whether the committee did not wish to comment on or investigate the current working of the financial system and, in reply, it was stated that the committee was prepared to hold a special meeting in order that it might hear Major Douglas, and it was also pointed out that it was felt that any

inquiry into a monetary system applicable to New Zealand should be held in New Zealand. The committee also stated that it could not approach its work with other than an open mind and obviously could not prejudge any issue nor, at this juncture, make any statement in respect to the existing financial and monetary system or any proposed system while the matter was sub judice. A DISTINGUISHED VISITOR. Mr J. A. Nash, M.P., who presided, welcomed Major Douglas as a distinguished visitor to the Dominion and one who had taken a keen interest in monetary schemes. He said that, if necessary, the committee would probably be prepared to hear Major Douglas at greater length in any other part of the country than might be possible at the present juncture. That, however, wag entirely a matter for Major Douglas to decide. Major Douglas' proposals are contained in a letter which he wrote when he agreed to appear before the committee. In it he set out the defects in the present industrial, social and economic systems and attached proposals for the consideration of the committee. The letter stated, however, that these proposals did not deal comprehensively with the defects which, he said, in his opinion, resulted primarily from a radically defective conception ot the proper function and ownership of financial credit. These proposed limiting the banks to paying a dividend of not more than six per cent, on subscribed capital; preventing a bank from increasing its capital in such a manner as to affect the gross amount of the dividend distributed in respect to business carried on in New Zealand, except with the consent and through the agency of legal enactment by the legislature; every bank to make an exact return of its assets within three months of the enactment of the proposals; where assets are real estate, buildings, furniture, fittings, appliances, etc. of a ■ bank and it is found that their value on the books for balance sheet purposes is lower than the market value, the difference shall be transferred to an account called the Suspense Account No. 1 and that all profits earned from any source over and above the amount necessary to pay a six per cent, dividend be transferred to Suspense Account No. 2. The first is to be applied to overdraft reductions and the second to reduction or reimbursement of interest paid on over-drafts. He proposes a scheme on a similar basis regarding insurance companies.