SOCIAL CREDIT MEETING

Otago Daily Times, Issue 24421, 5 October 1940, Page 15

SOCIAL CREDIT MEETING

Introducing her subject, "Foreign Money, Peace and War," Miss M. H. M. King explained at a recent social credit meeting what was meant byforeign money. Foreign money was regarded as a commodity, stocks of which were held by banks, and they bought and sold it as a grocer bought and sold sugar. Imports and exports between New Zealand and tbe United Kingdom determine how much sterling was bought and sold. If left to find its natural level, the rate of exchange between two countries would be determined by their respective debits to each other: in other words, it would be decided by the flow of trade between them. In practice the rate of exchange was affected by many other factors: it was rigged and pegged in all kinds of ways, for example, by financial operations such as the selling of stocks and shares, the buying and selling of outside exchange and arbitrarily by decree. The first two procedures had often been done intentionally to put a country into difficulties. Changes in the rate of exchange under the existing system could only benefit one section of the community at the expense of another, as shown in 1933 in this country. Miss King went on to explain why export trade was considered so vital. In a primary producing country such as New Zealand the reason was readily understood, but it was not so apparent in the case of, say, the United States, which was about 93 oer cent, self-supporting. As pointed out bv the secretary of the London Chamber of Commerce, the inadequate purchasing power to buy the goods and services available within a country caused it to join in the struggle for foreign markets. If the cause for this struggle was removed, as pointed out by Mr C. H. Douglas, the necessity for war vas removed. The real ob stacle in international trade was each country endeavouring to export more in money value than what it imported.