NEW PARTY FORMED

New Zealand Herald, Volume LXXI, Issue 21919, 1 October 1934, Page 11

NEW PARTY FORMED

" DEMOCRAT " POLICY THE PRINCIPAL OBJECTIVES GUARDING PRIVATE RIGHTS [BY TELEGRAPH —PRESS ASSOCIATION"] WELLINGTON, Futurday Under the title oj: the Democrat Party, a new political organisation, with headquarters in Wellington, a stated policy, and a promise to go to the polls in full strength, is in. process of formation throughout New Zealand, according to an announcement made to-day. The natnes of the leader and those of the selected candidates will be indicated at a future date. Assisting with the establishment and general organisation of the new party is Mr. A. E. Davy, who has resigned his position as a Reform organiser to undertake tho work. Mr. Davy said that the general policy of tho party would be to get back to sane administration, with a full recognition of the rights of tho individual, and to reduce the administrative overhead of the Dominion, which was far too high in comparison with national productionState Socialism Opposed The new party would incorporate in its policy such proposals as the following:— Tho encouragement of private enterprise and initiative and the abolition of State Socialism and undue interference; State trading concerns to be reduced as far as possible, l>e required to pay taxes, and generally be placed on tho same footing as private enterprise; a review of the present system of regulations and restrictions, with the object of simplifying and reducing them to a bare minimum of necessity; the abolition of the present system of government by Order-in-Couneil and by departmental officials; the placing of the purchase of State stores on a footing whereby all persons would have an equal opportunity to compete for all business on a fair and equitable basis. Among other important planks are: — Gradual reduction of the exchange rftc to parity with sterling; guaranteed minimum export prices for primary products; reduction in tariffs on British goods to encourage reciprocal trade; and the abolition of the duties on wheat. Lending to Farm^ra Further important points included: — Acceleration of loans to farmers at reduced rates of interest and on more liberal margins; obtaining of trade agreements with the United Kingdom and retaining a free market there for all New Zealand primary produce; definite organised development of alternative or new markets were possible; the attachment of a New Zealand tjrade commissioner to the High Commissioner's office in London; the .encouragement of the investment of British capital in national development works; exploration of avenues with a view to the derating as far as possible of farm j lands; review of the transport law and regulations for the drastic modification, I overhaul and reorganisation of the unemployment administration; placing of the Tourist Department under commercial management and launching a vigorous policy; the reduction in the size of the Legislative Council to 20 members and placing the Council on an elective basis; prohibition of members of the Legislative Council being appointed to the Cabinet; institution of drastic changes in the standing orders of the House of Representatives to ensure a greater efficiency and economy. CRITICAL COMMENTS STATEMENT BY MR. COATES PRICES AND EXCHANGE RATE [by telegraph—PßESS association] WELLINGTON, Sunday The following statement was made by Mr. Coates in an interview regarding the new political party. "The statement issued by Mr. Davy on behalf of the new-born Democrat Party makes interesting arid, in part, entertaining reading. We ore not yet told by name who and what interests are behind and financing the new party, but I take it that by now most people who are closely following what is happening are aware of the facts and that further revelations in the drama will not take them by surprise. They will, no doubt, have heard of the aspirations that centre in a.n Auckland office. "The first query that occurs to my mind is whether some unfortunate confusion may not be caused through the selection of the name Democrat Party. The Democratic Party in the Tlnited States of America are to-day in power and the public realise they are consciouslv depreciating their money, and all their efforts are directed to interfering with business. Our New Zeulahd Democrat Party's founder must have conveniently forgotten, or does not know, what the Blue Eagle stands for. "One point in the announced policy has a special bearing on our economic problems. It advocates the gradual reduction of the exchange rate to parity with sterling and guaranteed minimum export prices for primary products. Nobody would deny that this promise has immediate attractions. What could be better calculated by the first half of the sentence to win tho votes of all city people, and indeed, the votes of harrassed farmers by the second part of the promise? It really is an attractive carrot. However, anyone who takes the trouble to examine the double-barrelled proposition will see what plausible, self-contradictory nonsense it is. "To take a simple illustration, let us suppose a minimum price of Is per lb. is guaranteed on butter and that prices in the United Kingdom are 8d per lb. That immediately suggests an exchange rate of 150 when sterling money is converted into New Zealand money, since somehow or other 8d is translated into Is. A sunn of £IOO sterling cannot become a larger sum in New Zealand currency and leave the exchange rate at parity, and of course, this truth still holds good if, instead of raising the exchange rate., it is proposed to' give a guaranteed price by means of local finance, whether by loan or the 'costless credit' or any other conceivable method. "If this were attempted, the exchange ratio between New Zealand pounds and sterling would bo affected. Obviously enough New Zealand could, by the printing press, create additional 'pounds' liere, but we have yet to be shown how to guarantee that these pounds, to whatever limit they might be issued, would be accepted at face value in England and elsewhere, and that is simply another way of saying that exchange, parity is impossible with the proposed guarantee. " What if guaranteed prices call into existence mord products than can be disposed of in available markets. It may, of course, be in the contemplation of the new party that production will then be controlled and allotted, but this in turn brings a sharp cleavage with the rest of the announced policv, which' warmly condemns, all interference with private enterprise and initiative."