MONETARY REFORM.

Manawatu Standard, Volume LV, Issue 255, 25 September 1935, Page 9

MONETARY REFORM.

SOUGHT BY MR RUSHWORTH. THE EXCHANGE INDEMNITY. Per Press Association. WELLINGTON, Sept. 24. Tlie House met at 2.30 p.m. Tlie debate on the Financial Statement was resumed bv Mr A. S. Richards, who said the advent of the Democrat Party was undoubtedly to keep the Labour Party oh the Treasury benches at the end of the year. Mr H. M. Rushworth said that, according to the Budget, the National Debt had increased by £646.000. but it was a question whether that was a full and complete statement. When the exchange w r as raised the Government were persuaded it was necessary to indemnify the trading banks against the loss they would sustain. If the trading banks were making a loss of 25 per cent., was not the Reserve Bank making a similar loss, to say nothing of the deficit it took over ? If that was the case, why was it not necessary for the Government to indemnify the Reserve Bank? There was a mystery there, and if it meant there was an outstanding liability from the Government to the Reserve Bank, reference should have been made to it. If there was not an outstanding liability reference should have been made to the fact that a very mysterious change had taken

place in that the Reserve Bank was able to carry out its transactions without any loss whereas the trading banks made a loss. If the Reserve Bank did not make a loss, then it was questionable if the trading banks made a loss. If they did not, any claims they made under the Indemnitv Act were in a sense fraudulent claims. He thought the House and the country were entitled to a little more information.

Another point, said Mr Rushworth, related to the war debt. Until some three years ago provision had to be made for £BOO,OOO for interest. What was the position to-day? Had the British Government wiped off its portion of the war debt entirely, or was it only suspended? Was the Dominion still liable for it, and was it mounting up? Some reference to it should have been made in the Budget. He went on to deal with credit and currency and contended that the control of the present monetary svstem was inefficient. He said British bankers in 1914 inflated the currency and' robbed all their creditors, but after the war instituted a policy of deflation and robbed all their debtors, as a result of which great destitution had been wrought. And the persons who did that were still in charge of the monetary system. The only remedy, he held, was to have the monetary system scientifically constructed so that it reflected the real wealth which was being produced. New Zealand’s monetary policy, lie alleged, was imposed by the Bank of England, and it was imposed through the medium of sterling. Air Rushworth said the Bank of England largely influenced the policy of the British Government. FACTORY EAIPLOYAIENT. Air J. O’Brien said most of the things in the Budget were merely camouflage. Everything was shown in its best form. Nothing to the detriment of the Government was shown. The Opposition objected to such win-dow-dressing. Air O’Brien said there was another side to the picture. The Budget said there were 9000 more employees in factories, but the report of the Department of Labour showed there were still 10,000 fewer employed compared with 1931-32, and there was an increasing tendency on the part of factories to employ cheap girl labour. Since 1930-31 the number of boys under 16 years of age increased by 136, but the increase in tlie number of girls was 652, or nearly seven to one, so that youth in New Zealand was gradually being pushed out by cheap girl labour. Then, too, when girls and boys reached an age when they,:, should receive an increase in wages they, were put off and younger ones engaged. They found that the young men of the Dominion were becoming unskilled labourers. He regretted that old age and other pensions were not restored to their original level and that the Government were still retaining some 2-J per cent, of the reduction. He was also sorry no provision was made for invalidity pensions. He contended that the farmer would receive little benefit from the farm mortgage legislation passed last session and said interest rates varied from £7 7s lOd for the 20-year term to about £4 14s for the

50-yoar term. The farmers would receive benefit only if they took the 50-year term, so they would have a mortgage in perpetuity. ITe contended that the State Advances Department would have handled the situation much better than a semiprivate corporation. He urged the Government to abolish the gold tax and said that the amount often meant the difference between the loss and profit of mining companies. Mr O’Brien went on to refer to Mr Coates’s long-range public works programme and suggested that the Westland main south road should be considered. Mr Coates : It is very prominent in the programme now under consideration. Mr O’Brien said he was very pleased to hear it as the area had been’ without a road quite long enough as there was a large area of valuable land which could be opened up in that locality. Mr Coates: You have a good air service there now. Mr O’Brien: Yes, but we can’t take cows up by air! CATERING FOR TOURISTS. Mr C. H. Clinkard defended the gold 1 tax which, he said ; was levied when the exchange was raised and when gold was already realising a high price. He stressed the importance of the tourist traffic and urged its development in every possible way. He contended.that the inauguration of the American shipping line had greatly benefited the tourist traffic, and suggested that the curative properties of the Rotorua sanatorium should be made more widely known. He thought an attempt should be made to classify the unemployed and give first-class men the best that could be given. The present system tended to bring all men down to the lowest level. Continuing, Mr Clinkard contended it was the 60 per cent cut in the pjice of exports, not the 10 per cent cut in wages, that caused the large increase in unemployment and he said the country people would not bo caught by Labour’s promises. Mr E. J. Howard asked who was satisfied with the Budget. Mr 11. S. S. Kyle: The old age pensioners are.

Air Howard: No. I understand the old age pensioners are coming as a deputation this week. The civil servants were not satisfied either, Air Howard added. When were the conditions of the relief workers going to be improved ? The works at 12s per day were to be piecework jobs and none of the men would receive 12s per day. He urged the Alinister to make t-ne old age pension increase retrospective to April 1. RETURN OF CONFIDENCE. Air Kyle, contended that Labour would not be able to carry out its promises if it got into power. There was far greater confidence to-day than there was five years ago, and this was due largely to the way in which the present Government had carried out its policy. The position was improving and he did not think the Alinister of Finance received sufficient credit for the way in which he had handled the situation. He was of the opinion that the civil servants were auite satisfied with the Budget, and contended that the increase of 7i per cent, from October 1 was much better than 5 per cent, retrospective to April 1. Referring to the competition between American and New Zealand shipping, ho asked why people did not boycott American vessels. If that were done that company would not run away with as much as it was running away with. He thought the matter should be looked into right away to see if a better position could not be reached. He contended that greater assistance should be given to veterinary surgeons in the Dominion. The country required veterinary officers and they could not qualify in New Zealand. He was hopeful that assistance would be given to likely young men to go to Australia to qualify because there were positions available for them in New Zealand.

Air F. Langstone. said the Budget was not a true statement of the way New Zealand was standing to-day. He

said 41,000 of the 80,000 farmers had had to go to their creditors. That affected £90,000.000 worth of mortgages. He referred to the wage reduction and the effect it had on the countrv. Mr Langstone criticised the Unemployment Board’s policy, especially for subsidising the building of premises for wealthy companies and compelling poorly-paid girls to pay unemployment tax on meals received during their work. He predicted after the election that the Government Party would not have 20 representatives in the House. The debate was adjourned and the House rose at 11.55.