MONETARY PLAN

New Zealand Herald, Volume LXXI, Issue 21742, 6 March 1934, Page 12

MONETARY PLAN

MAJOR DOUGLAS SPEAKS SOCIALISATION OF CREDIT 'ATTACK ON EXISTING SYSTEM > y XIIMNG POWER TO THE PEOPLE Jin attack on tho existing monetary system and an elaboration of a scheme for monetising "concealed wealth" in financial institutions for the benefit of the people wore the principal features of an address delivered in the Toirn Hall last evening by Major C. H. Douglas. There was a largo attendance, which almost filled tho hall, wh:le others gathered in the concert, chamber followed tho address by means of a loud-speaker installed there. Varying charges were made for admiseioty

An enthusiastic welcome was given Major Douglas, when, to the tune of the bagpipes and preceded by a piper, he appeared upon the stage, and his address, which lasted just over an hour, was by applause. The Ma;for, Mr. G. W. Hutchison, presided.

In introducing Major Douglas the Mayor said it was only natural that tho monetary system, "which has served us for so long and, for that inaiiter, so well (laughter), would appear in times of depression to have failed us completely." (Applause.) "I know Major Douglas has appeared before the Parliamentary committee which is hearing evidenco regarding the monetary system," added Mr. Huichison, "but I implore him not to leave thestf shores before he has placed every aspect of his plan before the committee for consideration, and has answpred in. the minutest detail every question that an examination of thac plan might provoke."" ') Meaning of Money "I am going to talk almogt entirely about something that is very much talked about to-day, and that is money," said Major Douglas, who said the first prerequisite for an understanding of the aubject was for people to dehypnotise themselves of those ideas which an vested money with almost mystical powers and values of its own.. Money, of course, was not wealth. It was a word which was applied, primarily, to an accounting system, and, secondly, to what was called an effective demand and order system. The whole production system had only one sane objective—the production of goo<Js and services which an individual required for the raising of his standard of living and the freeing of his individuality in other directions with the least troublei to anyone.

Money did nob exist, for instance, for employment, the increase of trade, or for nine out of ten of the reasons usually given for its use, but for raising the individual and general standard of living. Major Douglas said the present money system required no more condemnation than the fact that it was possible to saj- the world was poor and nothing but hard work and thrift would get tha world out of that stata, when common sense made it plai:a that the world was overflowing with retii wealth. The present money Bystßm did not reflect the facts. Bank o! England View

Major Douglas said a director of the Bank of England, speaking i» Auckland recently, had said: "We will not let any wild-cat schemes of inflation interfere with the. return of prosperity." That person—and Major Douglas said he himself was speaking impersonally—had taken it on himself to for the' country from which he <iame. It was not reasonable that the Bank of JSngland, which was a private institution, should speak for Great Britain. "I think, as a matter of fact," Baid the major, "that if you took a plebiscite you would find that over 99 per cent of the people would diametrically disagree with the whole policy of the Bank of England," It was true—truer now than ever before—that the control of the money system was the control of the world, so that perhaps. those gentlemen who implied that they spoke for Great Britain and for New Zealand—although they represented, perhaps, only .1 per cent of the people—might be speaking the absolute truth. "From the point of .view of control they do represent the people,"' said the Epeaker, "and that is a matter for your serious consideration." ' Basis of Present System

It was shown at the beginning of the Great War that' the banks 'in Britain could not meet the public's demand for sovereigns in exchange for their notes, Then inconvertible Treasury notes were issued as legal tender. These notes represented the willingness <?f the general community to supplv goods and Eerviices and rested oh nothing more than, its power to produce these latter. The,' modern financial Bystem rested lupon the willingness of the general community to vindicate the claims yhich the system made upon t'hom. The question that the ordinary man asked, was, where is all this leading to ? ■The modern monetary system presupposed a system of "effective demand," but to-day there were enormous surplusas, not only of real wealth but of potential productive capacity, including the so-called unemployed, great area? of usable land and partly or "wholly unused factories and ships. These assets had been created by the section of the people who actually produced wealth, but who did not and could not create money, and who were merely allowed to scramble with others for whatever money happeend to be about.

Power to Monetise "Wo have allowed to go from us as jproducers and consumers tho enormously important power to monetise wealth," said Major Douglas. "That is the cause of the present trouble in tho World, and it may wreck the world. The monetary system does not represent physical facts, but allows to a monopoly the power to monetise wealth." Money had been defined by. some authorities as a medium of exchange. Formerly, individuals produced wealth and needed to exchange it among; themselves. The modern production system was not like that; it was largely the result of applying mechanical power to the production process, and there was a continual increase in the number of units of production for each unit of hum?tn energy. Til b extra wealth thus created without extra labour was the result of the community's cultural heritage of invention and so forth. Real wealth was to bo obtained, not by one individual from another, but from a few men worlrng in a central pool. Men had little chance to exchange with each ether, but groups put into a central pool. The money system was an "effective demand" on the central pool of wealth after the contents of the pool had 'Deen accounted for. "What we individually want is to get tile goods," Major Douglas declared. "Wo do not want to administer the system, so long as it delivers the gooclji. People are often hypnotised by" the idea of nationalisation, of national ownership, but that will not necessarily deliiro'r the goods. The form of administration is not the trouble. It lies in the distribution jßystem, with which 'the> :tnonetary system, is completely bomad up."

Reference was made by Major DougJim to the proposals he had placed before the Parliamentary Monetary Committee for the limitation of bank dividends to 6 per cent, the monetisation o!r the concealed reserves of banks and insurance companies and the distribution oi those reserves to the public, as detail©'! in the Herald on February 2(3. The speaker said his proposals would allow the people definitely to get hold o:c the goodu. , "My evidence to the committee was preceded by a correspondence iu which I had suggested the way to proceed was to investigate the defects of the existing financial system first," said the speaker, amid applause. "It is that system which is on its defence—not any p;rciposul I Jtyive." In explaining that his idea was to monetise concealed wealth for the benefit of the public, the speaker said that did nob involve taking away the concrete sbinfe, wealth, from anyone. It would not shift the ownership of tho weallth., but it would monetise it. He claimed that the power to shift money was a /sovereign power, which really belonged to the people. "Tho whole question rests on thg. power to monetise. this abounding wealth," continued Major Douglas. "The lines on which the remedy would proceed do not interfere with the just rights of anyone nor with the production system. . . No single body loses e:ccept those who have acquired by il legal and what, if exercised by others, would be criminal methods this power t;> monetise wealth at will. Steps in the Reform "It is obvious the real trouble does not lie in the making of a satisfactory scheme to produce right results," said the spsaker. "The trouble is getting t!lm,t scheme adopted. Tremendous issues are at stake. Tho monopoly of credit is the- greatest power in history, and it is childish to suppose that those institutions which have acquired the power will let go without trouble. "The first thing is to make it quite clear the game llias been found out. The second is to realise that the , intoreats of every individual lie jointly and together in obtaining a proper reform of the monetary system. The whole world is threatened with overwibelmiag disaster within a measurable ti.me, in which tho financial institutions themselves may go up in smoke, as a direct result of tho existing financial system. If the position is properly envisioned, there is isound justification for going to everyone* and saying our interests are one —tlbat we have only one enemy, not each other, but the financier. E very possible effort will be made to prevent union in "the common attack oi/ the common enemy. ♦'Thirdly," concluded Major Douglas, "don't expect to proceed other than by tho methods which were laid down by the finest tactician the late war produced, Foch—the principle of the limited objective. 'Take one trench at a time. I have shown you how to take the :firsb trench. Go away and take it." (Applause.) In moving a vote of thanks to Major Douglau, Mr. H. M. Kushworth, M.P., president of the Douglas movement in New Zealand, said he regretted that Major Douglas' fixed engagements with Governments and Legislatures of other countries made it necessary for him to leavo New Zealand next- day. It was the earnest wish of many in and outside the New Zealand movement that hm might be able to pay another visit in: the not far diistant future and to help the Dominion to preserve all that wasi best in its civilisation. The motion was seconded by Miss Oliiro Foster, and was carried by acclamation. Major Douglas was loudly cheered as ho left the hall.