DOUGLAS CREDIT

New Zealand Herald, Volume LXXI, Issue 21906, 15 September 1934, Page 15

DOUGLAS CREDIT

SCHEMES CONDEMNED "HOPELESS AS STOP-GAP" ■ 4cARBITRARY AND UNJUST LOCAL PROPOSAL IMPOSSIBLE [BY TELEGRAPH SPECIAL REPORTER] WELLINGTON, Friday Devastating criticism of the two different schemes put before it by Major C. H. Douglas and by the Douglas Credit Movement respectively is contained in the report of the Monetary Committee presented to the House of Representatives to-day. The committee says that for its intrinsic value the scheme of Major Douglas need not bave been specifically mentioned, but in consideration for those who attached importance to it, The committee felt it should be made known exactly what the scheme for New Zealand involved. "The dissipation of reserves by way of gift to borrowers is merely a short and sharp method of wrecking the banking system," states the report. "While it is mere fantasy to regard the scheme as a suggestion of a permanent nature, wo are also of opinion that it is hopeless even as a stop-gap. It would not affect prices in the primary producing industries, and would not add to anyone's spending power. 11 Fantastically Ineffective " "The proposal to distribute preference shares broadcast to all New Zealanders of voting age would be fantastically ineffective as a method of distributing the country's wealth. Whether one believes in private property rights or not, the taking of the property of insurance policy holders is mere caprice. The insurance proposal has absolutely no correlation with social justice. "The only logical conclusion from the proposals and evidence of Major Douglas is that—quite apart from their arbitrariness, their injustice and irrationality—they bring a net- decrease of purchasing power, and would add to the burden of unemployment and reduced incomes." Th§, report in various places describes the scheme and evidence of Major Douglas as capricious, indefinite, circumlocutory and even self-contradictory, his replies to questions being often evasive and irrelevant. "The Wishing Glass" "Economics through the wishing glass" is the description applied by the committee to the proposals of the Douglas Social Credit Movement. Thelte proposals are held to be "technically and administratively impossible to achieve with the present economic system." The application, of the price factor was also extremely cumbersome us to be almost impossible quite apart from the financial chaos which would ensue. It was a purely arbitrary procedure, savouring of wish fulfilment rather than clear thinking. It would entail rigid control of economic life comparable with that of Soviet Russia. "The proposals are retrograde in every way," continues the report. "They put forward an incorrect diagnosis of the economic and financial situation, envisage a purely monetary solution of our economic problems, do not offer proof of any chronic tendency to deficiency of purchasing power, have no logical connection with any of the known versions of the A plus B theorem, omit important problems of valuation, give impractical definitions of the factors to be calculated, would give additional stimulus to a boom, and in general would be highly inflationary. The results if the proposals were applied for any length of time would thiis be to depress living standards and ruvn the saving class. "The Douglas Social Credit proposals for the reform in our monetary system are perhaps idealistic in intention, but certainly detrimental and retrogressive if ever the application of them were attempted *