RATIFICATION OPPOSED

Otago Daily Times, Issue 26214, 26 July 1946, Page 7

RATIFICATION OPPOSED

ESTABLISHMENT OF STERLING BLOC

FACTOR IN WORLD PEACE Strong criticism of the Bretton Woods Agreement, scathing comments on the open letter by the two Auckland University College economists, and a plea for the setting up of a sterling bloc among the British countries to prevent a conflict between Russia and America formed the substance of an address given last night by Mr John Hogan in the Pioneer Hall to an attendance of well over 100 people. Mr Hogan made a spirited appeal to the people of New Zealand to see that the Dominion did not ratify the agreement, which, he contended, was beneficial to the United States but not to the British Nation as a whole.

The conflict between the United States and Soviet Russia in the Far East was sowing the seeds of a third world war, Mr Hogan said, for while America saw in the denselv populated countries of the East a market for her surplus products, Russia sought to establish industries in those countries for the people themselves. The Bretton Woods Agreement was aimed at bringing about an economic bloc of countries pursuing the old system of orthodox finance and the export of surplus products and this bloc, he said, must inevitably come into conflict with Soviet Russia.

A Balancing Factor ” The only hope of avoiding a conflict is a third factor and the .only factor ot any consequence,” Mr Hogan said. This is an independent sterling area—a third economic .bloc of sterling countries not tied with the dollar group but acting as a balancing factor between the dollar group and the rouble group. The British Nation can save another world war bv co-operation in this way. Australia and New Zealand constitute the key to the situation While we stay out of the Bretton Woods Agreement, we give the opportunity and incentive to the otnei British nations to remain outside it, too. Mr Hogan prefaced these remarks with a strongly-critical reply to the open letter sent to the General Assembly by Professor C G. F Simkin and Mr H. R. Rodwell of the Auckland University College. He described their interpretation as totally unreliable" and their argument as being one of ” complete and utter confusion. “It is something of a coincidence that in this evening’s newspaper appears a lengthy article on the Bretton Woods Agreement," Mr Hogan said. J past 18 months many of us have taken every .possible means to bring the Bretton Woods Agreement before the people of New Zealand, but we have been Ignored bv the press. Now there is this ong statement by two professors being given every prominence, and there will no doubt be an increasing flow of publicity in the press now that the matter is soon to come before Parliament."

The professors stated in their letter, Mr Hogan said, that the Bretton Woods Agreement did not mean a return to the gold standard and that there was nothing to fear in the gold clauses. They even suggested that New Zealand should agree to the gold clauses because the Dominion was a producer of gold, although they criticised selfish nationalism It was a contemptible suggestion, Mr Hogan said, and any further reference to it would be equally contemptible.

Mr Hogan mentioned the two plans put forward by Mr Morganthau and Lord Keynes and pointed out that, while the American insisted on gold. Lord Keynes gave gold no place in his proposals. British economists of the highest repute repeatedly put forward plans that did not include gold. The two Auckland professors justified the inclusion of the gold clauses by saying that it would be going too far to leave gold out of the plan altogether While they said that the gold standard was partly or wholly responsible for the depression, they attempted to justify the retention of gold in the so-called agreement. " The question to which we should Insist on receiving an answer is, why is gold brought into it at all? " Mr Hogan said. "We must examine this mysterious insistence on gold as a basis of International finance. How many of us have seen gold coinage in use and how many of us care if the Reserve Bank has gold or for that matter if anybody else has gold? There are two aspects of this insistence on gold. It is a method of supplying employment—quite useless employment that was allowed to go on even in war-time. The second aspect is that gold plays an integral part in the plan because one country has a monopoly of gold. That monopoly is held by the United States of America." The United States, with its vast industries and colossal mechanical power, was forced to export its surplus products to prevent unemployment and financial break-down, Mr Hogan said. The motive power of all international developments and wars in the past 50 years, and behind all the conferences to-day and behind the Bretton Woods agreement itself was this need to export surplus products The only real solution was the establishment of a financial system which distributed the wages of the machine. That was one thing the financiers would not do, because once that was done they would lose their power. Mr Hogan dealt with the American loan and contended that Britain could have done without it. She had accepted the Bretton Woods agreement because it was a condition of the loan. It was understandable that Canada should accept, because her destinies were so closely linked with those of the United States. South Africa had accepted it, because GO per cent of her economy depended on gold. There was no reason thal New Zealand and Australia should fall into line, and he appealed to the people of the Dominion to see that it did not do so.