FINANCIAL CRISIS

New Zealand Herald, Volume LXXVI, Issue 23263, 4 February 1939, Page 17

FINANCIAL CRISIS

ijIB. HAMILTON'S CLAIM FRUITS of labour policy PEOPLE BOUND TO SUFFER GOVERNMENT EXTRAVAGANCE [BY TELEGRAPH —PRESS ASSOCIATION] WELLINGTON. Friday "To make it obvious to every man and woman in New Zealand that the Dominion conference of importers was not simply a political manoeuvre aimed at discrediting the Labour Government, tho National Party has deliberately withheld comment 011 the restrictions • recently imposed," said the Leader of the Opposition, the Hon. A. Hamilton, to-day. "Now that the business community has stated its case, end now tliat a considered answer has been given by the Government, 110 case can be prejudiced by some plain speaking by me. "There is no pleasure in seeing * a prophecy of disaster fulfilled, but it is mv duty as Leader of tho Opposition to" state bluQtly that the. present financial crisis, coming as it does with remarkable swiftness after three years of the greatest prosperity, was forecast bv the National Party ever since the Government took office in 1935. Credits Squandered "Now all thinking people must be alarmed at the Government's desperate expedient, disguised as policy, which it hopes will extricate itself from its self-made difficulties," Mr. Hamilton continued. "This crisis was not inevitable. Tho Labour Government produced it just as it was prophesied they would. The one reason why the Government has been able to stave off the dav of reckoning so long is because of the legacy left by the National Party —over £10,000,000 in sterling funds in London and various Government departments in credit. Those savings have dwindled to a mere nothing. Those credits have been dissipated and squandered. The Reserve Bank has been drawn upon to such an extent that a danger signal has been hoisted. A crisis is iTpon us and it must develop inevitably. . "To add to the tension the .Labour policy has intensified the crisis by strangling production. Even export incomers falling. The drastic steps the Government is taking to-day are to deal with effects, not causes. To remedy effects there must be a reversal of the present socialist policy. Need for Co-operation "To restore confidence business must thrive and employment must be productive," said Mr. Hamilton. "Already men and women have been thrown out of employment. If the Government continues 011 its course more will be forced out and those still in work will have to pay more to keep those who are nnemploved. The bubble is then burst and the standard of living forced down. To reverse this movement the war between capital and labour nurtured by the Labour 'Government must end. _ "The employee must realise that his interests are irrevocably bound up with those of his employer and vice versa. Every facility must be given to capital, ljnth inside and outside New Zealand. Without absolute co-operation on sound lines there can be 110 founding of new industries or expansion of those of today.

The Labour Harvest "There has been no sudden emergettcv W-daV- 'The Labour crop of spendthrift" extravagance, sown successively fur three .seasons, is being harvested. The National Party always attacked the Socialist/ policy proclaimed by the Government as 'spending its way to prosperity, onward and upward.' The Government would not listen. The prophecy is fulfilled. The Government seeks to save its life by,desperate expedients and the people are suffering already. They will suffer more. 'ln three years' exceptional prosperity this Government has run through all arailable funds in New Zealand and more and so depleted the London funds that the Government itself has to declare a sta'te of emergency. I cannot believe that this crisis was not foreseen by the Government, and I am certain the people of New Zealand will not be ready to forgive the Government, who but a few months ago explicity denied that there was any possibility of such a state of emergency being at hand. "The People Will Pay"

"The price of success at the election unquestionably impaired political integrity," continued the Opposition Leader. "The people will pay. For years the Government- has not been frank with the electors. It has claimed that it could suspend or modify accepted economic laws. To-day they are in much the same position as King Canute and the tide, except that the ancient king announced before he faced the ocean that he held no mystic power to prevent the inevitable. . "The Government has spent until the larder is bare and to-day the Government is instituting an emergency policy of scraping and saving to repair the position, just as any private citizen \v;>-uld have to do who faced a similar emergency. It is distressing to think, however, that the crisis is deliberately created. The Government has attempted to give reasons for the crisis in an attempt to shelve part of the blame at least, if possible Public Works Expenditure

-"New Zealand cannot be content to see falling export returns and everyone must know that apart from lower prices the principal reasons for the decline are high farming costs an " a shortage of productive farm labour. The Government itself has contributed to the crisis by huge expenditure on public works,' which has assisted to swell the total amount of imports. _ t "I repeat,, there is no joy in harping on a catastrophe, but it is high time the people of New Zealand thought 'n terms of prevention rather than quac/c remedies, in politics as well as in many other aspects. Rising living costs must be reduced. Thousands of men employed to-day on unproductive works must be absorbed into productive industry. "No import restrictions will increase Sports, nor will this Government inn a way to pay their legions of employees without resorting to inflation, and that is the preface to a major catastrophe in which all sections of the community anist be engulfed. Men and women are now being thrown out of cniploynicut.

Bitter Fruit

"This Labour Government that has Proclaimed its practical virtues is actua"y no better than we originally ®'leged, a Government based on Socialist theories and ideals in which Practicability plays no fundamental PWt," said Mi\ Hamilton. "The results ®ust be bitter fruit to the man and yomarr in the street. This control or imports and exchange is the first effort *0 stem the tide of cause and effect, out there-must be more and more expedients of an equally unpleasant - "at,ire to follow. ~ 'London funds may be temporarily strengthened, but at what cost to the Standard of living of the bulk of our _ People ? As cost is not a word that Greatly concerns the Labour Governlittle svmpathv can be expected. National' Partv 'still calls for sane cj: thought and is still very much in the - for sound covermneiiit and freen «om for all."