“THE TRUTH ABOUT THE SLUMP”

Otago Daily Times, Issue 21632, 30 April 1932, Page 16

“THE TRUTH ABOUT THE SLUMP”

TO THE EDITOR. Sir—Mr A. N. Field, in referring to criticisms of his book “The Truth About the Slump,” persists in concentrating on the evils which have manifested themselves during the past few years whilst utterly ignoring the amazing progress made during the past nine decades—a progress unequalled in the previous thousand years. Is he unaware that the claims which he and his friends Douglas, Kitson and others so enthusiastically advanced have in the past been tried again and again and, being tried, have been abandoned? The existing system of monetary machinery did not come into being last year, or the year before. For 50 years' past it has served ns well, with Great Britain eventually emerging (despite the alleged despicable antics of foreigners in New York) as the world's banker, equipped with assets honestly earned, which enabled her to carry the lion’s share of the financial burden associated with the greatest Avar in history. Her banking system, apart from the visions of pretentious agitators, is the admiration of the known world and, taking the long view, associated with a happy turn of events (now temporarily dampened, down) evidencing a greatly increased wellbeing for all classes in the community. Lord Riddell tells ns that England was better to-day than it had ever been. We have better factories, better housing, better food, better recreation, better clothes, better transport, generally better wages, far fewer slums, better health, and generally, the good things of life are better and more evenly distributed. Even the recipients of unemployment relief, bad as the position is, are better off than employed workers were during the early part of last_ century. Wou.d they were better off still! All this progress has developed under the orthodox system of currency controlled by the banks, and doubtless there will be still further progress as the years go by. The banks are, by mere self-interest, compelled to give of their best, and the foreigners iu America know well that squalid social conditions create an unfruitful field for their activities. It is obvious that at times Mr Field, in selecting matter which in his own vision bolsters up his fantastic views on currency, gravely misinterprets his culled quotations and carelessly distorts actualities. Dealing with the MacMillan report he says: “Even this MacMillan report consisting largely of bankers was constrained to admit that the depression is, a monetary phenomenon.” In the first place as to the committee the reference to “ mainly bankers ” is an absurdity. The committee consisted of Lord MacMillan, two bankers, two economists, two Labour men, a representative of the Treasury, one representing the co-operative societies, and several business men of prominence. Then ns to the “ monetary phenomenon”: No such admission, either

actual or implied, was expressed. The committee said this: “It seems to us equally clear that the economic difficulties of the post-war decade are primarily due not to any wanton misbehaviour on the part of the monetary factors themselves, but to unusually large and rapid changes on the part of what are rightly described as non-monetary phenomena.” It then went on to furnish many causes of the existing slump. Newspaper space prevents elaboration, but anyone interested can, for a trifle, obtain copies of this report through the medium of his Majesty’s mails. In the latter part of Mr Field’s letter he deals in his customary dogmatic manner with' mutter that is admittedly controversial, making special reference to a Mr Arthur Kitson, who, in 1918, ferociously defended inflation and suffered a most drastic criticism at the hands of Mr Hartley Withers, whilst his writings generally, as far as instructed opinion is concerned, have about the same influence as Jupiter's moons on the price of New Zealand cheese. The National Review is a favourite vehicle for his outpourings, and in November. 1931, we find him writing: “When, for instance, the index figure fell from 111 in 1873 to 61 in 1896 this sufficiently, proves that gold is no reliable measure of value. . . . The generation then living had to pay a heavy price for having built Up a monetary system on a unit which could almost double its value within a quarter of a century.” The suggestion is, of course, that a scarcity of gold persisted for the 25 years in question. The fact is—and thin unpleasant fact is always dodged by bi-metallists and' other “ more money ” men—that the yearly production of gold rose from 20j millions in 1885 to 40J millions in 1896, showing a doubling of production for 11 out of the 25 years in reference. As prices fell steadily for the whole 25 years the “ doubled ” value of Mr Kit son’s is unquestionably not traceable to the gold standard. Dealing specially with this period, a leading economist tells us: “ The opening of better lands to cultivation, the ’discovery of richer mineral deposits, 'the perfection and cheapening of transportation, by which all these distant resources have become easily available, the increased mobility of labour and capital in finding out these new resources, the steady and extraordinary development of mechanical and chemical improvements in a great number of industries — these are some of the main causes which had affected the prices of a variety of commodities since 1873.” Amongst “men who matter" Mr Kitson is appraised at his true value, yet he has the assurance to say: “We are paying the price of allowing ignorant men to administer oiir national affairs.” Surely we have reason to be thankful that the sportive malignity of the gods has prevented Mr Kitson’s eccentricities from influencing affairs of State and has also, prevented men like Major Douglas and Mr Field from revelling in inflation, thus robbing the worker and in reality sowing the, plains with salt. —I am, etc.. Critic. Dunedin, April 28.