DOUGLAS CREDIT.

Manawatu Herald, Volume LIV, Issue 4405, 16 October 1934, Page 3

DOUGLAS CREDIT.

EXPOSITION OF PLAN

ADDRESS BY COLONEL CLOSEY

(Colonel S. J. E, Closey, of Auckland, one of the leading proponents, of the Douglas Social Credit Plan, delivered an address in the Town Hall supper-room on Friday evening, when he dealt with the possibilities of applying the plan to this Dominion. The Mayor (Mr M. E. Perreau) presided. Colonel Closey prefaced his address with a review of the depressed period, which he attributed to a failure of the monetary system, with a consequent drop of world price levels. The task of raising these levels had occupied the world for six or seven years and lack of success had encouraged economic " nationalism. The trend now in almost every country was to expand purchasing power as a considered policy. This was being followed out by the United States, Mexico, Sweden, Egypt, and Japan. Men had to combine to tackle the money problem to avoitl the loss of 150 years of civilisation. Colonel Closey continued that the plan for the Dominion did not involve anything like the inflationary issue of the Bank of England, which had been undertaken in the vast house-building scheme involving an expenditure of £3*000,000 for the main purpose of providing the wages! to buy goods. The CTcl slogans which, counselled hard work and thrift still persisted in spite of the declared fact that in November last the world held in store an equivalent of 21 years’ production, and production had' everywhere out run consumption. For six years other nations had realised the need for a change in system and it was essential that we profit by their experience. The first move towards a changed money system, in the Dominion was the establishment of a board or council elected by the country, to control the issue of money. This would be known as the National Credit Authority. It would comprise nine members, three elected by Parliament, three by the industrial unions, and one each by the Banking Institute, the Univer- • sities, and the Municipal Assoei- - ation. These men would have the status of Judges of the Supreme Court, and be free from, interference, but working under laws with regard to. money control. The governing law would be that always the Dominion would have sufficient purchasing power to buy all consumption goods awaiting sale. Tt % was suggested that the organisation comprise a controller of currency, replacing the Governor of the Central Bank, under this officer to be the issue division, the securities valuation division, and the foreign exchange sale and purchase division. The three groups would be responsible for issuing currency, receiving securities and making loans, and dealing with the transfer of funds to and from abroad. The procedure would be, in tackling the problem, to take over the -Reserve Bank, with full compensation, thus removing any element of profit-making from, our money system. Then would follow a survey of our position, which the speaker declared to be a. of purchasing power as against our goods awaiting sale, amounting to £7,000,000. This sum had to be is- ' sued to the people without debt and ,so as, not to appear in prices. There were two main ways of attack. The first method recommended was a bonus for primary producers of the amount necessary to ensure, a fair return to the farmer for the real world value of his goods. To make prosperity tangible it wah necessary to pay the farmer an amount for his produce which would represent the value of the goods we received in exchange for his exports. Thus we the farmer to-day 1/3 per fb. for butter, with a proportional increase for wool. The second way of increasing the purchasing power of the people was a discount on the necessaries of life. • Certain articles would be declared subject to a just price discount of one-third and this discount would be given the purchaser by the retaileV. When proofs of the rebates were presented to the National Crqdit Authority the ti’adesman would be given a reim- • bursement. There would be a fixed limit to the total amount available for issue in this manner, sg that on no account would .the amount of money put into circulation exceed the goods available for sale. The speaker then cited certain objections which were levelled, and replied to them. Production would not be unduly accelerated out. of proportion to the requirements of the public, lint the normal proportion of supply and demand would evolve. The cry 'of inflation could be answered in the manner that the Douglas plan produced the desired relationship between goods and money, which was neither inflation nor deflation. To the argument that a board could not regulate the demands for more money than the economic, balance required it, was replied that in questions of war men were elected to control our ■ , policy; why not in monetary af- • - fairs? - ' Colonel Closey made a strong appeal for the Dominion to take her own action instead of awaiting external influences.