PRICE FIXATION TO SOLVE DEPRESSION

Manawatu Times, Volume LVI, Issue 7068, 30 January 1933, Page 8

PRICE FIXATION TO SOLVE DEPRESSION

Address by J. A. Lee, H.P. The Government’s proposal to raise the exchange rato in New Zealand was denounced by Mr. J. A. Lee, M.P. for Grey Lynn, when addressing a large audience in the Opera House yesterday afternoon. He offered as an alternative, Labour’s policy of price fixation as a panacea for the depression. Mr. J. Hodgons presided and had with him on tho platform Mr. A. S. Richards, M.P. for Roskill. Mr. Lee opened his address by stating that his mission to Palmerston North was not so much to show that raising tho rato of exchange was wrong and that the Labour party would light the Government’s intention, but to tell his audience that tho Labour party had an alternative. Labour had a much more intelligent way out than the tiddly-winking exchange proposal. The people who had voted Forbes and Coates had now lost confidence in them. “I have no time for. honest George Forbes’ policy,’’ declared the speaker. “I call him the dunce at tho head of the class (laughter). Nor have I any time for the policy of Mr. Gordon Coates, but nevertheless I am not going to let Mr. Downie Stewart escape his sharo of the responsibility for the misery, want and poverty existing in New Zealand to-day.” Mr. Lee declared that when Mr. Stewart was in the Cabinet nobody would believe that New Zealand was a political paradise. The late Minister had helped to scuttle the ship and must shoulder some of the burden of responsibility. Last election the Coalition cry had been: '‘Follow Britain to prosperity,” but where was that prosperity? The Government had been sitting as if mesmerised, waiting for something to turn up. Cabinet had not a mind as to tho crisis. First it said tho worst had passed and in tne next breath declared tho silver lining was a long way off. There was only one way out and that was to increase purchasing power. New Zealand was not poor. It had abounding wealth and if the Budget could bo balanced with goods instead of money, the Dominion would have a large surplus. What was the nature of the crisis? It was only that New Zealand had lost the right to buy as extensively in Britain as it had been able to do in the past. When New Zealand borrowed from England it did not import money —it simply secured a credit in tho Old Country. (So that borrowing only increased the flow of goods from Britain to New Zealand. Borrowing was thus not the cure. The remedy was the creating of a purchasing power inside the Dominion itself so that New Zealand would get a stimulus. Unemployment would then vanish overnight. It was not a 15 per cent, increase on a bankrupt price that the farmers wanted but a just price in terms of New Zealand currency for the article they produced. The proposal of the Labour party was to give the men on the land a fixed price for their produce. Tho farmers of the nortn were not deceived over tho exchange business. They knew it was only another straw when what was wanted was a lifeboat. Who were those people who said prices could not be guaranteed? They were the banking interests who on the other hand, could guarantee the price of gold. Why could not the price of butter be guaranteed just as easily as the prico of wheat? A guaranteed price was not inflation. Once a price was fixed one got immediately a commodity index for money and that was neither inflation nor deflation. The banks could fix their rates of interest but denied that the principle could be applied to produce but as a matter of fact, prices would have to be fixed and quickly at that. Raised exchange was not bringing more money into the country—it was simply taking something from the consumer and giving it to the producer. ‘‘Wo can’t go the way we are for very long. I believe at the next general election Labour’s policy will be accepted,” declared Mr. Leo amidst apidause. ‘‘Under the lash of deprivation people are thinking and they know that Labour is right. ’ ’ The position in New Zealand was not similar to that in Australia. In the Commonwealth there was a surplus of imports but in New Zealand tho surplus was in exports and the curtailing of tho purchasing power of the people would only increase New Zealand’s surplus at Home. Labour’s proposal of a fixed price would have meant £4,000,000 extra to New Zealand farmers in the Dominion alone. In addition there would have been the export bonuses. Had Labour’s proposal been accepted at the last general election, New Zealand farmers would have had £14,000,000 to £15,000,000 more than they had now and one must remember that credit created in New Zealand could not be sent overseas. The money must be spent in New Zealand which meant increased employment in New Zealand. It would not take much moro of the Government's present trend of legislation to create a panic. Their deflation policy was undermining confidence and closing up institutions. One largo company in Auckland which had been accepting deposits had gone into liquidation, while two others in Wellington could not pay back their deposits. Had those institutions been closed under Mr. Lang there would have been a song made about it. There was no reason why New Zealand should not bo once again the inspiration of the radical world and again reckoned as God’s Own Country. (Applause.) Mr. Hodgens moved the following resolution which was carried unanimously:— ‘‘That this meeting of Palmerston North citizens recognising that tho depression is a crisis of plenty and not of shortage, and that an increase in purchasing power Tathcr than a diminution is essential to effect a cure, affirms that the Labour party proposals for the control and issue of credit: (1) To provide a prico guarantee for farmers; (2) to restore social services and wages; and (3) to enable a policy of essential works to bo prosecuted, is the only policy calculated to restore prosperity in New Zealand. And further affirms that such a palliative as raising the exchange will produce no lasting effect and is likely at a time when national unity is so essential, to result

in fostering antagonism between town and country." A vote of thanks was passed to Mr. Lee by acclamation. Mr. Richards briefly addressed the -gathering at the conclusion, announcing that he. would be speaking in Palmerston North at an early date-