PRICE LEVEL

Otago Daily Times, Issue 22610, 29 June 1935, Page 11

PRICE LEVEL

LABOUR PARTY PLAN CONTROL OF BANKING SYSTEM An explanation of the Labour Party's plan for an internal price level and control of the currency and banking system was given by Mr F. Langstone, M.P., in an address in Christchurch on Thursday night. Mr Langstone said that when a Labour Government took office one of the first things it would do in order to give effect to its policy would be to take over the whole of the currency and creditlending institutions. The State would own the banking system, and would create, credits for the goods that were produced. In the case of butter, the producer would be paid Is 3d a lb instead of rereiving Cd or 7d a lb as at present. That would be done by revaluing or remonetising butter and the State purchasing it. New Zealand produced annually 160,000 tons of butter, of which 30,000 tons was consumed in the Dominion and the balance of 130,000 tons exported. Under the Labour Party's plan, butter would be consumed by the people of New Zealand just the same as at present,' but the stores would have to buy it from the State. The surplus that was not required for local consumption would be sent overseas and exchanged for goods on & basis of reciprocity. EXCHANGE OF VALUE. It was reasonable to assume, said Mr Langstone, that, as the prices of the goods exported by New Zealand had fallen, the prices of goods we bought back had also fallen, and what would take place would be simply an exchange of value. We would get the same value as before, only the price would be altered. He realised that internal prices had to be raised to make the farmer financial, but it had to be recognised that we could not control prices overseas. Under the Labour plan, he added, there would be no control of the overseas price level, but we would be able to say to the Mother Country that we would buy back the same amount of credits as she allowed us on the goods she bought from us. "We have got to do this because with the income the farmer is receiving to-day he is insolvent and is not able to meet his commitments, and everybody else is in the same position, with the result that we have poverty in the midst of plenty," said Mr Langstone. They would know that goods sold in London for £SOO would have charges against them in New Zealand of £1123. All that the Labour Party would do would be to give the farmer £1123 for his goods which had been sold in London for £SOO, and he would thus be able to buy back the goods received from London for that £SOO. The result would be a stabilised internal price level and trade level at the same time. It would solve the economic problem, and make it easier for New Zealand to enter into trade agreements with other countries. The credits would belong to the nation, and what it did for the farmer it would do for every other eection of the community.