THE LABOUR PARTY

Otago Daily Times, Issue 22211, 14 March 1934, Page 5

THE LABOUR PARTY

'"3 SAVAGE AT THE TOWN HALL '■ 1 i i LARGE AND ENTHUSIASTIC GATHERING ** LABOUR’S PUN FOR NEW ZEALAND ” / - Mr M. J. Savage, M.P., Leader of the Labour Party in Parliament, addressed a very large public meeting in the Town Hall last night, all the seats on the floor in the gallery being occupied by the Otago Trades and Labour Council, and scats on the platform were also occupied by men and women prominent in the Labour movement. The chairman apologised for the absence of the Mayor (the Rev. E. T. Cox) and the Deputy Mayor (Cr J. J.. Marlow), both of whom were in Wellington on business, Mr J. W. Munro, M.P., was also in Wellington on Government business. Mr Morland then introduced Mr Savage to the audience.

Mr Savage, on tiring, was received with cordial applause. The title of his addreeg was “Labour’s Plan for New Zealand.” He said he would begin with the parliamentary institution. He could not begin with a better subject, because in these day* of falling democracies it was well to know where they were going. Generally, there was some kind of a new red herring for the people to follow during a general election, and it had been noticeable during, say, the last 12 months, there was an attempt being made to discredit the institution of Parliament, rjather than those who had misused it. He said that in the most friendly spirit. They did not misuse it intentionally/ but h|e said definitely that they misued it, and there was a choice of reasons.. The parliamentary institution was quite a simple institution. It was composed or 79 men and one woman. — (Applause.) ine woman was not the least intelligent of the crowd.—-'(Applause.) In fact,, she could more than nold her own with the average of them. —(Applause.) That, however, 1 by the way. There were 80 members, and of- course , they did about the same as any other deliberative assembly would d 6: they selected a chairman, who was called the Speaker. In addition, they had a chairman of committees, who presided while the House was in committee. For the life of him he could not imagine any other means of doing the country’s business. He could imagine other means of appointing the People’s representatives or appointing , individuals to do the job, and it was there that they parted company with those who thought the parliamentary institution had outlived its- usefulness. The Labour Party said there were quite a number of people in the House who nught have outlived their usefulness, and they wire - also prepared to admit: that tor many years' past the machinery of Earliament had r been misused. As he had indicated already. it , was .quite a. simple piece of machinery, but he . was going to suggest that any alteration in the method ' of appointing persons to carry, on the government of New Zealand might not b« any improvement ph what they had to-day; As a matter of fact, if they had a small group of persons who took tbe power to govern-from the same source as* the Government of to-day took its power, they would get about the same results, . probably worse. If they opened their mouths to criticise them they might find themselves within four walls. For himself he : agreed with that great American who were not prepared to allow government of the people by the people for the people to perish from the earth. That would be a serious step for the people to take. The moment the people discarded the institution of Parliament and agreed to allow one individual or a sma ‘l group of individuals made up of the present elements, he could not see where the improvement, was to pome from. Most people then would agreed that it wa s not the fault of the parliamentary machine at all; it was not the fault of the institution: it was the fault of those who inhabited it as representatives of the people. Some of the responsibility might fie with the people—{“ hear, hear ’’—because the people made a selection from time to time. During the last 25. pr 26 years or more he had been taking part in elections in New Zealand, and generally speaking, he had heard misrepresentation of Labour on every hand. There was nothing new, in. the philosophy that Labour was preaching to-day from the tour corners of the ■ earth. There was nothing new that they could preach. He said that for the benefit of their Trends the newspapers, who seemed to think the Labour Party ought to have something new every week—they ought to have a new name for themselves or something like that. Well, they were the same Labour Party as they had always been —(applause)—and since he had been in New Zealand for the last 27 years the philosophy of Labour had been about the same. Details might change from /time to time, but fundamentals remained unchanged, ; bdeause men and women, wage and salary earners, went for the most, part from the cradle to the grave just. from band to mouth. If they, analysed that statement very carefully they would find it would take a lot of shot and shell to dispute it; He was going to say definitely that the average wage earner had no chance tills side of the grave of being anything else, so long as the competitive system tasted. For many years, so long as he could remember, the- Labour Party in this country had maintained that living standards withm the Dominion need not depend upon external influences; and that successful international action could be; based only in successful internal action on the part of the nations concerned. The recent International Conference, , which everyone now admitted was a complete failure, was unanswerable evidence in favour of that contention. America appeared to be the shining example among all the nations in her attempt to put her own house in order before attempting international action. One need hot spend much time in discussing the reasons for the pres"nt depression. It was generally agreed,that the fault was not with production. In that field the world was more prolific than ever, before in human history. .The fault lay with inequitable distribution, due to lack of purchasing power. Modern currency reformers, including followers of Major Douglas, generally laid it down that those who produced goods and services had not been getting sufficient return to enable them to purchase those goods and services. Some said this was entirely due to a faulty .banking system, but it appeared that there were other factors that had tb be taken into consideration. So long as the wages system lasted employers of labour had some responsibility in the matter. It was a little difficult to understand the currency reformer who complained of a shortage in purchasing power, and at the first opportunity recorded his vote m favour of reducing wages, j; INDUSTRIAL CRISES. Generally speaking, it would be tound that industrial crises were, due to a shortage _of ..purchasing power, which

meant that the people were not being fully paid for their services. If the people received in purchasing power the full value of their services there could be no such thing as an industrial crisis—unless, of course, through failure in production. If, for instance, the people received, say, 75 per cent, of the value of their product or service instead of, say, 50 per cent., the period of time between crises would be longer, and if the people received the full value of their product or service there could be no such thing as an industrial crisis. A country’s home and foreign trade could not for any considerable period exceed the purchasing power of its owu people. The people of a country must be in a position not only to purchase what was produced and kept in the conntry for consumption, but they must also be able to pay for goods and services that were imported in exchange for exports.— (“ Hear, hear.”)

THE MACHINE. The machine was rapidly displacing the wage earner, and unless the wages of the machine were made available to the people there must be_ a shortage f in purchasing power and periodic economic crises. The benefits of science and machinery should be available to the people.; —(Applause.) Must they wait for something to happen in other countries before they could enjoy the products of their own country ! Surely not! The main problem] to-day was to increase the purchasing power in the hands of the great mass of the people. There was no other solution of presentday economic problems. While production continued to increase _ and purchasing power continued to fall industrial stagnation must be intensified. When 'the full history of the war years was written it would furnish an unanswerable reply to those in high places who said that they could not help themselves out of the tragic position into which they had allowed themselves to be forced. PUBLIC CREDIT. During those years about 135,000 men had been called to the colours in Sew Zealand. Approximately 100,000 had been embarked for war. Up to March 31, 1919, they had spent about £25,000,00 in pay and allowances, £15,750,000 on account of maintenance in the field, over £6,000,000 in transport of troops, nearly £4,500,000 for equipment. The total expenditure to that date wag approximately £62,500,000. A year later they had paid out about £30,250,000 in pay and allowances, the total Payments reaching the enormous figure of £78,000,000. The men | had been organised and trained for war, they were provided with medical ana dental treatment; allowances were made for their dependents. Where did all the monev come from to carry this into effect? When it was suggested that men should be organised for the purpose o carrying out a national plan of wealtn production those in authority always met the demand by asking where the money was to come from; £55,000 bad been raised in New Zealand. War services had been organised and paid for by the use of the printing press. Gold played very jitt e part during or since the ’ war as a basis of credit and currency. The mistake that had been made in raising money for war purposes had been to incur a debt for the use of credit that belonged to the people. The limitation of taxation in any form as a means of raising monejr for development purposes had long since been exceeded. Falling incomes and rising taxes would inevitably bring about a state ot national bankruptcy uplese a bait was called. The only alternative -was the use of public credit through a national banking system. CREDIT, AND CURRENCY. Some people thought they should have an investigation into the present banking system and possible alternatives. Labour had made its own investigation, and i.ad its own remedy for the present obsolete system. Labour was not prepared to allow those who were charged with failure to constitute the investigating tribunal. That would .appear To be equivalent to asking a person charged witn an indictable offence to select his own jury. They did not mind any fair investigation of the position. The basis of the -.monetary system was* entirely wrong. Their whole economic existence depended upon external prices and conditions. Total production in 1930-31 amounted to approximately £100,000,000, J;* 16 ”; exports amounted to about £35,000,000 for the same period. Why should internal prices and living conditions be based on the external sale of" a-little more than one-third of their production? The alternative was cdntrol of a monetary system based upon goods and services, and as goods were produced their monetary equivalent to be made available to those responsible for production in such proportions as to make it possible for the people to enjoy the fruits of their labours. There was no other object in production. The value of money could be kept constant only if it was capable of being expanded or contracted in accord with the needs of industry and social services.— (Applause.) FIRST NEW ZEALAND 1 # 1 EXRERIMENT. The first New Zealand experiment of any consequence in the use of public credit bad been earned out during and immediately following the war._ When production was nothing approaching what it was to-day there was a_2, extensive use, if not abuse, of the use of public credit. Early in the war years the superstition about gold] as the only safe, base for their financial system had received a rude shock. Acting upon the authority of Parliament the public credit had been substituted for gold. The banks had been empowered to make advances to individuals and private and public corporations for the purpose of enabling them to subscribe to the war loans. \ FATAL BLUNDER. , Had the Government of the day taken possession of the banks and constituted itself the sole isstiing authority, instead j of paying high rates of interest to private banking corporations for the use of i their machinery, there would have been a 1 different story to tell to-day. Under the 1 policy that had been adopted Government j securities had been handed to, private ' lending institutions in return for a serj vice in credit that belonged to the people. Under the policy advocated by Labour i Parliament would .still be master of finanI cial supplies, and when the representai tives of the people decided to raise credit I for public purposes Government securities 1 would be lodged with the national banking system, which would supply financial requirements at the cost of the service. Labour stood for the complete control of the country’s monetary system, the whole service of which would be based on goods and services: and as goods and services I were produced their monetary equivalent i would be made available to the people..— (Applause.) By systematic national control of credit and currency guaranteed prices for produce, and the payment ot wages and salaries sufficient to enable all citizens to purchase their, contribution to national production, an internal .price level could be established and maintained. Anything less in the way of incomes for the masses would result in recurring periods of depression. MARKETING AND GUARANTEED PRICES. The chief reason for export of any classes of goods or services was that they would be exchanged for other classes of goods or services which could be economically produced in the country of export. In the case of New Zealand, it was imperative that they should continue to export at least sufficient to meet the charges on their external debts, plus sufficient to pay for goods and services which must be imported. In all such cases the responsibility was a national one, and those who produced the goods for export were entitled to expect some guarantee of prices sufficient to meet the cost of Dominion living standards. Guaranteed prices for goods produced according to plan must cover the whole field of production. They were not going to have the standard of living reduced in New Zealand without a battle. — (Applause.) Under present conditions their monetary system’ and living standards were based on external price levels and conditions. They could not control these prices and conditions, and could be successful in external markets only when their methods and living standards compared with those of their competitors. So long as external markets depended on low wages and conditions they could not hope to raise their living standards much above the average of their competitors, and their monetary system could never be I stabilised. The position in Britain was a fair sample of the uncertainty of external prices for their monetary system and living standards. In six years end : ing in 1920 the weekly increase in the wages of British workers amounted to approximately £15.500.000: while during the following two years. 1921-22, the wages bill was reduced by £10.250,000 weekly. At the end of 1932 the weekly wages bill of Britain was £11,347,550 less.than in 1920. These figures did not include

agricultural labourers, Government employees, domestic servants, shop assistants, and clerks. EXCHANGES AND EXTERNAL PRICE LEVELS.

The recent raising of the rate of exchange, said Mr Savage, was a feeble and ill-advised attempt to supplement the incomes of exporters who were wholly dependent on external price levels. It "was, at least, an admission that external price levels were not sufficient to maintain primary production in the Dominion. It was a precedent that could be materially improved upon by guaranteed prices for the whole of their production, and by using the full powers of the State to enter into agreements with Britain and other countries for the purchase of their surplus products. The raising of the rate of exchange depreciated the currency without increasing it in volume. Labour would increase the volume for the purpose of giving men work. INTERNAL MARKETING. What was true of external marketing applied with equal force to internal marketing. It was just as logical to have minimum prices for products as it was to have minimum wages for the wage-earners. They were mutually dependent. Without guaranteed purchasing power guaranteed prices for products could not stand; and without guaranteed prices for the products of labour the price of labour itself could not stand. Planned production, guaranteed prices, and orderly marketing was the objective of Labour. Anachronistic methods of production and distribution must give place to organisation, LAND SETTLEMENT. Land settlement must be an integral part of their national policy, but it was useless to talk of such a policy without first laying a financial foundation which would allow the farmer to make a living. Unless those who were already on the land could be made secure it was hopeless to try to establish others.—(“ Hear, hear.”) When the farmfer was encouraged to go on the land to pa-ovide a. national service be must carry with bun sonie guarantee of security. With complete control of their monetary system and proper planning of production such a guarantee could be given. SECONDARY INDUSTRIES. A complete survey of the whole field of production was long overdue. World conditions were forcing them to give greater attention to building their home market. Present prices and the general outlook iur the future of external markets were anything but encouraging. In any case, there was no market like the home market. Everything else depended upon it. it was of their own making and might be improved upon at will. It was better to build upon an exchange of goods and services within their own country than to attempt economic trade with il countries. Boys and girls leaving their schools were entitled to remunerative positions in the work of building their own country. Goods that must be iraported should come from the British Commonwealth free of duty, in accord with trade agreements entered into on that basis. EMPLOYMENT. The immediate employment of all workers on work of first-class importance must be taken in hand, continued Mr Savage, if they were to save the country from bankruptcy. Land was awaiting improvement and settlement; public works —including certain railways—-were nwai - ing completion; the construction and maintenance of national and seconda highways, back-block roads, and appro\ed local body works would find employment for thousands of men at rates of pay that would enable them again to establish sonie degree of independence and become useful purchasers in the markets of their oun country. Buildings (public and private) were going to rum, railway rolling stock was going to pieces, while artisans of all classes were employed part time on relief works of questionable advantage to the community. Labour would accept the responsibility of organising and' equipping groups of men suitable for the preparation and settlement of Crown and other lands. Men who wer e engaged in the preparation’ of land for settlement would bs given the first chance of becoming settlers. The organisation and equipment of men for highway and road works would also be undertaken, and financial provision would be made for local bodies to carry out approved works. In that respect the public credit would be made available by the Government. - HOURS OF WORK AND WAGES. It was the intention of. Labour to utilise to the fullest extent, the very latest in the way of mechanical inventions, new processes, and research knowledge and to give the benefits derived to the people respobsible for, production. That meant shorter hours of labour and increased pay sufficient to enable those engaged in the work of production to enjoy the fruits of their labour. SOCIAL SERVICES.

During recent years serious inroads had been made into pensions, superannuation, the National Provident Fund, and a number of other social services. The Government of the day had, during a period ot prosperity, been remitting taxation to the wealthy and declaring surpluses, while at the same time failing to meet their obligation to the superannuation funds. Financial agreements with public servants and superannuitants had been ruthlessly smashed. All forms of pensions had been reduced, and in many cases the old people who had done the pioneering wo,rk had been reduced to a bare existence. Labour would completely reverse that policy, and extend the benefits of a generous superannuation system to all citizens. Education and public health services had also been attacked, and it was the duty of Labour to strengthen the Education Department and to establish a health service in the Dominion that would guarantee the best that medical science could provide for every man, woman, and child irrespective of income

MORTGAGER. As a result of the policy of inflation that had been carried on during and immediately following the war, and the subsequent policy of deflation extending over a number of years, equities in land and homes were rapidly disappearing. Hundreds of farmers and others had already lost everything, while a large number were on the brink of ruin. Labour proposed to adjust all mortgages on the basis of au average of wholesale prices for the past seven years. Legislation preventing foreclosure would be enacted pending the stabilisation of an internal price level which would enable holders to meet their obligations. OVERSEAS DEBTS.

In view of the changed conditions, including the increased value of money measured in exports (which was the only means of paying an external debt) it was the intention of Labour to negotiate with the British Government ! and financial bouses with the object of converting the overseas debts to lower rates of interest. The problem of international debts was a growing one that would never be solved so long as nations had anything like an equal exchange of goods and services; and when they failed to do that bankruptcy on the part of at least some of them would be inevitable. Nations could not exchange goods for goods and pay an outstanding debt at the same time.— (Loud applause.) SUMMARY. Mr Savage presented the following summary of the objectives of the Labour Party:— 1. The parliamentary machine has not failed, Governments have failed, and they and their supporters are attempting to lay the blame on Parliament as an institution. , 2. Any form of government which derives its power from the same source as the present Government will give about the same results to the people. It is mainly a matter of active and intelligent action on the part of the people. 3. The present depression is not due to any failure in production. It is due to the fact that producers of goods and services are not receiving sufficient in the way of prices or wages to enable them to exchange goods and services with each other. 4. The home and external trade of the Dominion cannot, for any considerable period, exceed the purchasing power of the people. Unless the incomes of the rank and file of the people of the Dominion are sufficient to allow them to purchase imports as well as goods and services produced and kept for consumption in New Zealand periods of industrial stagnation will be inevitable. 5. World conditions indicate that all nations, including Great Britain, are striving to provide their own needs, and that external markets for Dominion products are very uncertain. 6. The alternative to proposed quotas on Dominion exports to Britain is a planned system of production, including primary and secondary industries, and the

safeguarding of such industries against the unfair competition of products from low standard countries. 7. The increased productivity of machinery and scientific processes must be made available to the people in the form of increased purchasing power, shorter hours of labour, national health service, and universal superannuation at retiring age or invalidity. 8. The present monetary system is based mainly on external prices and conditions, and should be transformed into one which would have for its foundation the goods and services which are produced in the Dominion, and which in the long run provide the true foundation of any monetary system. Banking should be entirely controlled by the State. 9. Tbe present high rate of exchange should give place to guaranteed prices for Dominion products, such prices to be sustained by guaranteed wages and salaries, which alone can supply t a substantial foundation for trade and industry. 10. Mortgages on land and homes should be adjusted on the basis of an average of wholesale prices for the past seven years, and equities should be preserved by legislation preventing foreclosure pending the stabilisation of internal price levels which will enable holders to meet their obligations. 11. Negotiations should be immediately commenced with the British Government and financial houses for the purpose of having the overseas debts converted to lower rates of interest, in sympathetic relationship with the increased value of money measured in exports. 12. The present forms of unemployment relief should be abolished as rapidly as possible. Schedules of public works (local and national) should be prepared and carried out at standard rates of pay.— (Applause.) Mr Savage closed his remarks by saying that if at next election the Labour Party was returned to Parliament with 20 additional members, giving them a strength of 44 in the Hou.se the outline he had given that night would be the foundation of the policy that the party would- give effect to at the very earliest opportunity.-—'(Loud applause.) VOTE OF THANKS. Mr F. Jones, M.P., moved and Mr M. Silverstone seconded —“That this meeting records -its thanks to Mr Savage for his able and instructive address; expresses its confidence in him as Leader of the Opposition; and pledges itself to support Labour candidates for the purpose of putting into effect the policy that he has outlined.”

The motion was carried with loud applause.

Of Auckland, who has been called to the Inner bar a# King's Counsel.