Patea & Waverley Press FRIDAY, MARCH 6, 1936 LABOUR’S PROGRAMME

Patea Mail, 6 March 1936, Page 2

Patea & Waverley Press FRIDAY, MARCH 6, 1936 LABOUR’S PROGRAMME

THE coming .Parliamentary .session, which is due to commence oiv March 25, is likely to x 3l ' the most momentous in the country’s lii,story, Lor the first time there will be a Labour Ministry occupying the Treasury benches, whose duty it will be to carry out the Labour Party’s " xu'ogrammc. So far dew x_>eople outside tire Uabinet appear to know what the Labour Party’s jirogramme actually is. It is known that an alteration in the present banking system is contemplated, but so far the details of the change have not been made known. Sx>eaking at Stratford in August last, prior to the general (‘lection, Air. Savage said: “The . control of exchange by a national bankingsystem would enable the Government of New Zealand to make available to traders, at par, all overseas credits required to give effect to the Dominion’s part in any trade agreement with Britain or any other country. The control of trade, by means of agreements, xilus allocation of overseas credits, would do away with the necessity of raising the rate.of exchange and remove the necessity for protective tariffs, without leaving Dominion manufacturing industries open to com’petition -with the products /of overseas cheap labour. The rate of exchange could not be reduced until an alternative method of assisting farmers by guaranteed prices had been established.”. With regard to the guaranteed prices for farmers, the details of the Government’s scheme have yet to bo announced. Will the guaranteed prices apply to everything obtained from the land, including tobacco, honey, and fruit? Will the guarantee be based on an arbitrary figure to be named by, Cabinet, or will it be based on the average of the actual prices received during the past 5 or 10 years? If on the average prices received during the last live years, the Government should be on a good wicket, for with a continuance of the present improvement in trade the average price should be able to be realised by farmers without any Government assistance at all. The Prime Minister, the Hon. M. J. Savage, put the position with regal’d to the farmer and public credit fairly clearly in the speech already quoted, when he declared that the public credit should be the means (ised to establish a money system which would equat'd buying power with production and thus enable the people to get the. full benefit ol; their labours. Sir Alfred Ransom said that the amount realised from the present rate of exchange above par—-and paid by the people of New Zealand—was nine million pounds a .year. If that amount had been advanced by the Reserve Bank-—from, the public credit —direct to exporters, instead of raising the rate of ex-

change, the depreciation of New Zealand currency would * have been less, if it existed at all, while the present barrier against Britain’s trade would certainly not have existed. The use of the public credit should be controlled by a national credit authority, wliose duty it would be to provide the credits authorised by Parliament, and to administer the money system on a properly stabilised basis. Mr. Savage went on to say that the raising of the rate of exchange to £125 depreciated New Zealand currency by not less than 25 per cent, without increasing the amount of money in circulation, ■while a direct payment from the public credit to farmers would increase the amount of money in circulation without depreciating New Zealand currency to the same extent, if at all. Sir Alfred Ransom stated at Dannevirke recently that the raising of the rate of exchange had “increased the national spending power by nearly £.1.0,000,000 annually.” As a matter of fact, the raising of the exchange rate did not increase the national spending power by one penny piece. It merely transferred spending power from some pockets into others, the transfer very often being in favour of those who needed it least. All rules of com-mon-sense suggested that the real basis of any monetary system must, in the Jong run, be the productivity of the Dominion’s industries, and in that case it was clear that a properly organised banking system should be capable of providing the means whereby those who produced the wealth of the Dominion would be able to enjoy the fruits of their labour. Prom the above it would be safe to assume that one of the first duties of Parliament during the coming session will be to take over the Reserve Bank and to introduce a State banking system, giving the State the sole right to issue bank notes. With this power, the State, in other words, the Labour Government, will have the funds to carry out at any rate a goodly portion of its programme without depending on taxation for its revenue, as other

Governments have in the past. There would appear to be no valid reason why the programme should not be. carried to a successful issue in this manner, provided that the' issuing of the State notes is not overdone, as was the case in Germany after the war. It is freely admitted that there is plenty of everything hi this country for the average individual, but not the wherewithal for one to purchase one’s requirements. If the Government can procure this “wherewithal” that has been so sadly missing of late years, and distribute it amongst the people by means of wages, then they vvill have gone a long way towards solving the problem of unemployment and depression. The trouble in the past has been that successive Governments have deemed the problem to be incapable of solution, and have allowed matters to drift, whilst they folded their hands in 'despair. The present Government has the courage and the will to tackle problems in a v ay that no Government has ever tackled them before, and their efforts should be crowned with complete success. We think they will.