INDEPENDENT COUNTRY PARTY AND MONETARY REFORM.

King Country Chronicle, Volume XXIX, Issue 4771, 12 November 1935, Page 4

INDEPENDENT COUNTRY PARTY AND MONETARY REFORM.

(To the Editor). Sir, —I attended the address delivered by the Independent Country Party candidate at the Municipal Hall on Thursday evening, as I understood that he professed to have a guaranteed cure for the economic ills from which the world has been suffering for the last few years. The cure as expounded by Mr. J. H. Penniket was delightfully simple. In short, he proposed (a) To take over the Reserve Bank and to issue sufficient currency to bridge the gap between the externaFprice of our primary products and the internal costs of production; and (b) to reduce tariffs. We are to have what Mr. Penniket calls an equation to ensure "that there shall be no money in circulation without goods and no goods for sale without adequate money." This apparently simple, result is to be achieved per medium of the printing press. How this socalled "equation" is to ascertain Mr. Penniket does not tell us. He is equally vague as to how and in what manner this product of the printing press is to be distributed. He says, "the extra necessary money could be put into circulation through various channels." No doubt we could all provide Mr. Penniket with helpful suggestions as to the most suitable channel for distribution of his superfluous bank-notes. Of course, once this scheme is in operation tariffs could be entirely abolished. The consolidated fu'nd could be recouped from this loss of Customs duty and the secondary industries subsidised by the Reserve Bank notes issued by a printing press which would soon be working overtime. This "get-rich-quick and free-money-for-all" scheme, however, unfortunately overlooks the. fundamental economic fact that you cannot increase the internal currency without increasing the internal costs. Every country that has adopted the printing press as a method of increasing its wealth has ended in bankruptcy.. During the last five years the depression, its causes and its cure, have been engaging the best brains of the world. Eminent economists in every country in Europe and America agree that there is ho practical short-cut to prosperity. As was to be expected, several prophets have arisen during the last few years who have proclaimed, some with fanatical zeal, that they have discovered the golden bridge. When, however, their schemes have been subjected to an analytical examination they have one and all been shown to be entirely f allaceous. When a candidate for Parliament seeks election on the basis of a so-called monetary reform, one can, I think, ask that such a scheme should be supported by some recognised authority in economics. The only authority, however, referred to by Mr. Penniket in the course of his address was Captain H. M. Rushworth, M.P. Does Mr. Penniket really expect the electors of Waitomo to believe that he and Captain Rushworth have discovered what the most eminent economists of the world have failed to discover? I would remind this candidate of the truth of that ancient and cryptic saying, "A little learning is_a dangerous thing." There is another aspect of Mr. Penniket's address on which I in common with many others would be glad to be enlightened. When Mr. Penniket first appeared in this district, and before he announced his candidature as a Member of Parliament, he appeared as a disciple and advocate of the Douglas Social Credit movement. When he spoke on Thursday night, Mr. Penniket studiously avoided any reference to Major Douglas and his schemes. Why has he abandoned Major Douglas for Captain Rushworth? Why did he tell his audience all about the general election in Canada and remain silent about the Province of Alberta? Perhaps I can supply the reason. Major Douglas was a prophet who promised money for nothing for everybody in the form of "costless credit," "national dividends," etc. His scheme has, however, been Universally condemned as utterly fantastic and unsound by economists and statesmen in every country. Only one State, namely Alberta, has attempted to put it into force. Although it isonly about six weeks ago since the Douglas Social Credit Party took office w Alberta, the results are air ready somewhat illuminating, and no doubt are sufficient grounds for Mr. Penniket's silence on this point. Mr. Aberhart, Alberta's newly-elected premier and late school-teacher and radio evangelist, promised the electors before the election that every adult in Alberta would be paid £5 a month as a national dividend. To pay this sum would require a mere two million pounds per month, or twentyfour million pounds per annum. When elected, however, to the dismay of many supporters he declared that if this payment threatened the financial stability of the province it would not be paid. "However, we don't anticipate that," he added hopefully. When the Alberta Government took office it was discovered that not one of the Cabinet had ever been in Parliament before. For the post of Provincial Treasurer, which corresponds to our Minister of Finance, and wbich would presumably be the fountain head of the new currency scheme, Mr. Aberhart appointed Mr. Cockcroft, who prior to his election was the local storekeeper in an outback village of 144 inhabitants. Yes,

I think Mr. Penniket was no doubt wise i'n making no reference to either Major Douglas or Alberta. As, however, Mr. Penniket a short time ago appeared as an advocate of Major Douglas, and as some of this candidate's most ardent supporters have

until quite recently continued to expound with fervency and zeal the Douglas Social Credit theories, perhaps Mr. Penniket will tell his audience next time he speaks in Te Kuiti, exactly where he stands.—l am, etc., FINANCE.