MONETARY COMMISSION’S REPORT

Northern Advocate, 17 September 1934, Page 4

MONETARY COMMISSION’S REPORT

The report of the Monetary Commission, presented to Parliament on Friday, is more interesting than useful. We are afraid it will not do much to unravel the tangled skein of monetary and kindred subjects unless the Government gives unrestricted heed to the recommendations in the majority report. It may be taken for granted that it will not do so, for it will bo argued that as the commission was divided in its opinion—there being a minority report signed by Mr 11. M. Rushworth and thei Labour members, and an individual report presented by Mr Downie Stewart—it would not be politic to do anything. Nobody expected a unanimous report from a body of commissioners who, whatever claims they may have to speak authoritatively on the subject they were asked to investigate, consisted of opposing schools of thought. The Government has reason to be pleased with the majority report, which justifies the Cabinet’s actions during the period of the depression. The report criticises ruthlessly the policies of private trading banks, which, it declares, put Hie earning of dividends for their shareholders before the national interests of the country in a time of stress. It was to remove the difficulties placed in the way of the Government by the private banks, says the majority report, that the establishment of the Reserve Bank, with its absorption of surplus exchange credits in London, became necessary. This is a contention which will no doubt be strongly debated by the banks'. The report suggests various directions in which the Government should modify banking practice and make more easy the burden which rests upon mortgagors, but in these matters, as in others, the Government has already foreshadowed legislation, such, for example, as the National Mortgage Corporation mentioned by the Minister of Finance when submitting the Budget. The majority report sweepingly condemns the Douglas Credits proposals, which apparently do not contain a single redeeming feature. Without making any affirmation or denunciation of the Douglas theories, we think it will be admitted that financiers or bank authorities who reason along orthodox lines could not be expected to commend a system which is revolutionary in its .nature. Those who condemned Gallileo because he -declared the world was round, no doubt honestly believed the world was flat. But that did not prove Gallileo’s philosophy to be wrong. History proves that he was right—that he was merely ahead of the time. Who- will say that a Royal Commission which was unable to reach unanimity on general principles has definitely disposed of a system which has been espoused ( with almost fanatical zeal by j supporters in all parts of the world ?