LABOUR’S POLICY

Otago Daily Times, Issue 22723, 8 November 1935, Page 8

LABOUR’S POLICY

IMPORTANCE OF CREDIT PROPOSALS

ADDRESS BY THE REV, E. T, COX

Some of the main planks in Labour’s platform were outlined by the Rev. E. T. Cox, the party’s candidate for the Clutha seat, at Stirling on Wednesday night. The meeting, which was well attended, elected Mr A. Renton to the chair.

Opening his address, Mr Cox, who was received with applause, explained that Labour’s programme had been drawn up at a conference prior- to the election. One of its principal proposals was the restoration of the cuts made in all pensions and, where full pensions were involved, to place them on the basis of a reasonable standard of life. In addition the party intended to establish a national system of superannuation payable at 60 years of age or invalidity. It would be impossible to pay out on such a scheme, he stated, unless it were contributory, but the policy of the Labour Party was to inaugurate a contributory scheme so that every man would pay into a national fund from jyhich he would be able to draw a pension at 60 years of age. Only in that way could most of the people make themselves secure against their declining years. A point to be noted in connection with this proposal was that the pensions would be extended “in accordance with scientific development apd increased production.” Dealing with Labour’s intention to restore all cuts in wages and salaries Mr Cox stated that the City Council in Dunedin had restored all cuts and was assisting the unemployed, to the extent of £4OO a week. As the restoration of the cuts cost £6OO a week, the council was spending £IOOO a ■week more than when Labour came into power. Yet a statement of its revenue for the first six months of the year showed that it had made a profit of £40,000. This showed that the people paid their rates when the money was in the community, and thus the city funds had benefited in spite of the fact that the council was spending more. The restoration of the cuts had benefited the whole community. It was the purpose of the Labour Party to safeguard the superannuation rights of all civil servants.. The, funds should be based on actuarial principle. The position to-day was that all the contributions that, were going in were being used to pay civil servants who were retiring. This was not sound business. THE CREDIT PLAN Mr Cox devoted a large part of his address to an outline of his party’s proposal to assume control of the public credit, ■: This,' he said, was the plank on which. Labour would stand or fall at the election. In explanation, he added' that the Reserve Bank returns showed that New Zealand had about £8,750.000 in notes and £2,750,000 in coin. For the purposes of an illustration, the amount could be given as £12,000,000. That was all the cash that New Zealand possessed, but Qiere wag £120,000,000 of bank deposits. What was the difference of £108,000,000? Actually it existed only in the books of the banks. Having made this point, Mr Cox referred to an advertisement published by the National Government Party referring to the closing of the doors of the Government Savings Bank in New South Wales and to offers made by advertisers for the purchase of savings. Mr Cox claimed that any Labour candidate, would be able to shoot bullets through this advertisement. The actual position was that the money, sharks tried to exploit circumstances which had been engineered in New South Wales for political purposes. Would these people think of offering 6s 8d or 12s inthefl for other people’s savings if they did not know that these savings were worth 20s in the £l. The position merely was that 20s could not be obtained at the moment. If anyone were foolish enough to engineer a scheme under which everyone went to the banks to get his money, there would not be enough money in the Dominion to meet the Otago deposits. All the banks would then have to close their doors just as the Savings Bank ,did in New South Wales when, for political purposes, a run was made on it.

“The first question we are asked is: * How are you going to get the money to nay for guaranteed prices?’” Mr Cox continued. “But where do we get the money to-day? The Government will tell you that Labour intends to use the printing press, but we are not going to print a single note or coin a single Shilling. i;or all legitimate purposes the _ existing amount of £12,000,000 is sufficient, but w_e are going to give effect to a credit policy.” At present Great Britain was in the hands of the Bank of England, he continued.. Gladstone, the greatest Chancellor of the Exchequer Great Britain had ever possessed, had said that he had suffered continually at the hands of the Bank of England. It had not been until the establishment of the Post Office Sayings Bank that Gladstone had been able to lay his hands on £1,000,000 without the consent of the Bank of England. Mr Lloyd George, another great Chancellor, had said: “These men establish a veto on all progressive measures.” Labour proposed to take this power out of the hands of the banks as the supreme authority, and to do that it did not need to change the constitution of the banks. It would need only to change the directors of the Reserve Bank, nominating men who believed in the Labour Party, and they would be just as safe and sound as the men who sat on the board to-day. The same would be done with the Bank of New Zealand. / “Having done this, we shall issue a little credit,” Mr Cox continued. Sir Alfred Ransom, the fertile brain of the Government party, naa said in Dunedin, in the course of a speech which would go down in history for its colossal stupidity, ignorance and wilful •misrepresentation, that it would cost £30,000,000 for Labour to carry out its programme. Mr Cox claimed that, even if such a large amount were involved, it could be issued in the form of credit. It would be perfectly sound policy to have £150.000,000 of credit with £12,000,000 of cash. “Dq you mean to tell me that New Zealand would go broke if we issued another £30,000,000 of credit? he asked. “The country must be worth £1,000,000,000. If it is not w'e are all broke because we have £500,000,000 of debts. The addition of £30,000,000 will not affect the stability of the finances of this Dominion one iota. The banks object, but only because they will not get a rake-off, for the added amount will not he interest-bearing.”

What Labour proposed to do -was po new thing in the history of the British Empire, Mr Cox stated. A railway had been built from South Australia to Perth without the raising of a single pound that was interest-bearing. If that could be done to the tune of £7,000,000, New Zealand could do it to pay guaranteed prices. In addition, the Isle of Guernsey had been issuing free _ credit for 120 years. Several countries had Stateowned banks, and it was time New Zealand followed. What Labour would attempt to do would be to carry out what waa operating in the flourishing countries of the world to-day. Mr Cox illustrated by means of a graph the price movements of crossbred wool over a long series of years, stating that it was possible that New Zealand would experience another period of low prices. If that did occur, the urgency was all the greater for the establishment of guaranteed prices. He went on to explain how these prices would be fixed, and stated that one of the chief benefits would be the fixing of a standard price for the production of the country, upon which everyone lived. Thus the standard of life for all the people would be set. The second great benefit would be the stabilisation of the value of land, if the value of land were standardised by the standardisation of the value of production. no man would have to walk off his farm. British farmers had been overwhelmingly in favour of a continuation of guarjinteed prices for milk, and Finland, Norway, and Sweden, the moat prosperous countries in the world, had guaranteed prices for their dairy produce. Japan had a guaranteed price for rice, and the United States guaranteed the price of tobacco. They had been a success wherever they had been tried, and Labour was only trying to bring New Zealand into line with other countries.

A QUERY ANSWERED "I have been asked what will happen if this is to be a Ion" period of low prices,” Mr Cox continued. “ The answer is that we shall have to issue more credit. If we never get above what would be an average price over the whole of New Zealand’s history since 1871, we shall have to pay for it, but we expect that high prices will cancel out the low prices. We shall only issue the free credit to meet difficult times, and this, in turn, will be offset by good times. In the final issue the loss is on the country and will have to be met. Is it not better that, if such a position is to be met, it will be met by the nation instead of by the producers alone? The whole of the public benefits by high prices. Let the whole of the public stand the debit.” Sir Alfred Ransom might say that Labour’s policy would devalue the Dominion’s credit, but he had also said that Labour proposed to confiscate the £120,000,000 of bank deposits. A sillier thing had never been said by a Minister of the Crown. These deposits consisted largely of the savings of the wage-earners. Was it likely that Labour would sacrifice them? The Government to which Sir Alfred Ransom belonged, however, had depreciated that sum of £120,000,000 until it was worth only £60,000,000 to-day. It had done this first by going off the gold standard and tjien by the imposition of the high exchange. One of the beauties of the Labour Party was that it would restore the value of the deposits to £120,000,000 sterling. Mr Cox went on to refer to the record of the Labour Government in Queensland, stating that the increase In savings bank deposits there last year had been 50 per cent, higher than in any other Australian State and 100 per cent, higher than in Victoria and South Australia. The basic wage was higher than in any other State, and the average number of hours worked was smaller. The percentage of unemployed m Australia was 18, while the average in good years stood at about 9 per cent. While the figure wag recently as high as 224 per cent, in New South Wales, it was only 5.3 in Queensland. But these things, contrary to what one would imagine, did not increase the cost of living, which was lower in Queensland than in any other State. After stating that Labour proposed to inaugurate new industries,. Mr Cox -referred to the possibilities of obtaining oil from coal in New Zealand. He contended that the Government itself should undertake the expenditure that would be: involved in the erection of the necessary plant, and added that 2000 miners and 2000 factory workers could be employed in producing sufficient oil and petrol to meet the requirements of the Dominion. An important point in Labour’s policy, he added, was the abolition of the boards. His party proposed to eliminate them entirely, and instead to appoint a Minister in charge of each department and to associate with him members of the party. Together they would form the governing authority, and only the ordinary salaries would be paid. Sir Alfred Ransom bad also declared that one of the hidden policies of the Labour Party was the abolition of the country quota. Some Labour man might have said at some stage that the voting of the country should be on equality with that of the city, but was it likely that Mr Edie or Mr Campbell, or himself would vote in favour of the wiping out of their own constituencies? “We have ■lost enough electorates in Otago already,” said Mr Cox. “Are we likely to lose Clutha or Central Otago or Chalmers by our votes?” He repeated the assurance given by the Leader of the Labour Party that there would be no alteration of the law in this respect during the life of, the first Labour Government. “ Labour has a safe, sound, _ and reasoned-out programme,” the candidate concluded, “ and, if you agree with me, the only thing to do is to vote for the Labour candidate at the forthcoming election.” The candidate was accorded a vote of thanks, the mover stating that he did not believe in “ this confidence business,” which could be left until the election.