PROBLEMS OF FINANCE

Poverty Bay Herald, Volume LIX, Issue 17945, 24 November 1932, Page 3

PROBLEMS OF FINANCE

MARKETING OF PRODUCE STATE BANK ADVOCACY DOUGLAS CREDIT SCHEME A wide range of financial and 'currency matters was covered by speakers at a 'public gathering held last evening under the auspices of the Gisborne branch of the Stable Money League, the attendance being sufficiently large to indicate a growing interest in the aims of the league and in the subjects chosen by the respective speakers. (Mr W. D. Lysnar gave a lengthy and interesting address on the marketing of New Zealand produce and the operations of the trusts to the disadvantage 'of producer and consumer; Mr James Morrison gave a lucid account of some effects the adoption of a State bank scheme would have in the Dominion, and incidentally condemned roundly the proposal for the establishment of a central bank associated with an international clearing-house; and Mr G. 11. Lockett furnished in a short space a great deal of information on the subject. of the Douglas credit scheme. 'The gathering was presided over by Mr H. E, Maude, who requested an attentive hearing for tihe speakers, and general support for the objects of the league in its endeavor to impress on the Government of the country'the fact, that the time was long over-due for a more resolute attempt to conquer ithc the current depression. Choosing for his subject, the stabilisation of prices, Mr. W. D. Lysnar declared that the producers of New Zealand were not getting what they were entitled to in the matter of prices. They were encircled by combinations which were highly organised, but they were themselves unorganised. Mr. Lysnar pointed out that the farming community of New Zealand were now receiving about £30,000,000 less per annum than they had received five or six years ago. If fhev could win back only half that loss, it would put the finances of the farmers in order, without loss of time. 1929 PRICES QUOTED

The speaker read a statement lie had made in 1929 to the chairman of the British Producers’ Association, to the effect that the shortage of fat stock then current in England was due to the operations of trusts, which paid an uuremunerative price to the farmers and charged an unduly high price to the public, this power being supported by the trust ownership of freezing works in meatproducing countries. Mr. Lysnar quoted to tlie meeting the prices ruling at that period for New Zealand meat. Dominion beef then sold from Is 3d to Is'9d per lb., in the Civil'Service Cooperative Stores in London. The farmer in New Zealand was then getting only 2Jsd per lb. for his beef, and the middlemen were raking oft a profit of about la per lb., or more. The operation ot trusts had exploited the producer and consumer alike. The speaker quoted from Smith’s Weekly a statement that the producers of Australia were then getting 2d per lb. for beef, which was sold wholesale, at Sinithfield, London, at 4d per lb. The retail prices, however, ! ranged from lOd per lb. to Is 4d per lb. ' Even while the Ottawa Conference was in progress, there appeared a cablegram ! in New Zealand papers from London, indicating that retail prices at Home had Been advanced 3d per lb., while in the producing countries the buying prices were being forced down. How long was this to go on? lie asked. MUTUAL CONCERNS Unless the business community here and elsewhere, added Mr. Lysnar, did not work in harmony with the farmers to change this state of affairs, it would riot be long before New Zealand _ contained not one single solvent business. Mr. Ramsay MacDonald liad said that the depression was not a matter of overproduction or under-consumption, but was due to something that was happening between the producer and the consumer’. If that was so, said Mr. Lysnar, why could they not get at it and expose it? Lord MacMillan’s committee on marketing and prices had reported to the Home Parliament that something , must be done to change the present system; that was supported by Lord Beaverbrook, who in a communication to the Poverty Bay Farmers’ Union had declared meat to he the crux of the Empire’s problems. Mi - . Lysnar stated further that New Zealand had only two real outlets for meat, these being through two large buying firms, whose price schedules were followed by other smaller buyers. The marketing of meat and other New Zealand produce must be organised so that the producers would receive a greater share of the financial results. There was a shortage of stock throughout the world, and yet the breeders of stock were being exploited and the consumers likewise. The New Zealand Meat Boat'd had all the power it needed to rectify' the position from the Dotriinion farmers’ point; of view, but the personnel of the hoard was out of touch With the real farmers, and had done nothing with all the powers conferred on them. MEAT BOARD’S POWERS A properly-constituted elective bleat Board could tackle the situation by controlling the price of meat going out of the country, said Mr. Lysnar. The retail price of meat in England could be cut by half and yet return a reasonable amount to the producer and at the. same time yield a handsome profit to the middleman. The same observations applied to New Zealand’s exports of wool, butter and honey. The question of the trusts must be curbed, added 1 the speaker, who spoke in favor of the 1 methods adopted in Canada to enable Mho investigation of public or private 1 charges of business tactics in opposition to tne public interest. The capital of ' the world was coming into the hands I of a few, and in every walk of life there was distress caused by this domination of finance. Unless Governmental action was taken to organise the export of produce, there would be no chance of emerging from the depression. Mr. Lysnar was asked a number of questions, and in the course of ono reply declared that it was not competition from other countries that was spoiling the returns to New Zealand producers, but the fact that the retailers were demanding too high a scale of prices, and keeping down the consumption of meat. The wholesale prices at Smithlield were unconseion- ' ably low, hut retail prices were too ■ high. Actually, cow beef and ewe I mutton was selling at Smith field at a price representing less than the cost of sending them there. FINANCE AND MANAGEMENT “It appealed to me very strongly, while Mr. Lysnar wiis speaking, that the farmers should be getting better treatment, but I have always held that the financial side of things has always held up Governments, ’ ’ said Mr J. Morrison, tile next speaker. The system of trading to-day had produced a condition of affairs in .which finance was the master instead of the (servant. Finance was management, and good management would solve the difficulties of the trading world today. The first need was to correct' things in our own household, and 1 until that was tackled, there was no I question of controlling prices overseas.

. The position was made possible simply | because farmers and others were still prepared to accept the note issue of the banks, which was inflated to the ( fullest possible extent. If a farmer j accepted an advance from a hank on i j his produce, lie could not expect to j determine the disposal, of the produce. The real need was for a | domestic currency, controlled by the State, and if the farmer could get his advance from the State instead of from the banks, he could, with his fellow-farmers, hope to control the disposal of his goods. it. was quite impossible, lie considered, to employ money based on a gold value at remunerative production in these days, because the price, ot gold was so high that a ■currency based on the metal could not earn its own interest .in production. The ideal was to have a State currency which would finance the export of produce, and would return a just price to the farmer, and finance the State supervision of marketing. Mr. Morrison pointed out that a domestic currency scheme must be held separate from tile gold-value currency on which the overseas transactions must be based. The important tiling was that the State bank, issuing its own notes, would jnirchaso the New Zealand farmers’ produce in New Zealand, export it on tlie gold basis, and retain for the State any profit on the overseas transaction. At present, the farmer was paid in local currency, but the banks retained the profits of overseas transactions. A BASIS OF SOLVENCY Mr. Morrison held that a. State bank would furnish a basis of solvency for all State activities; without that basis, the finest ideas and ideals would fail. The State bank must be the genesis of all financial reforms in this country. The basis of the domestic currency must be the value of the production in the country. The latest proposal to defeat the State hank scheme was a chain of central banks throughout the world, with an international clearing-house. This would probably lead to an era of unheard of prosperity, but it would eventually lead to a period of slump worse than anything ever experienced, with the power still held by the goldowners, and the chains tightened upon humanity. A State bank would safeguard the country against this prospect. The proposed central banks were to he nothing more or less than glorified lending offices. Replying to a suggestion from Mr. T. G. Lawless that the State bank scheme sounded Communistic, Mr. Morrison declared that this was not so. There would bo no chafige in the banks system that the public would be aware of. There would he, however, a change that their exploiters would notice. All tho piiblic would know was that tlie depression was lifting. Tho Douglas credit scheme was advocated by Mr. G. 11. Lockett, the thud speaker arranged for tho evening. Ho expressed the opinion that this scheme was a universal one, for the new era that tlie world was entering upon. New movements were always ridiculed, and their advocates considered cranks, but eventually they became accepted. Today there was a big note of depression iu the newspapers, but he was optimistic as to the future, and especially optimistic regarding the Douglas credit scheme. The scheme claimed that the mojiietiary system of any Community should lie managed by others than the banks; that the basis of tho system should be the productive value of the community; that money should he demonetised, so that monetary systems should hot bo based on gold or silver. “IN A CLEFT STICK” The majority of people were in a cleft stick, said Mr. Lockett, hound, by old ideas, and especially by the idea that they must produce more and consume less; yet it was by consumption that prosperity was produced. The Surplus credit from the disposal of production would be held by the community as a whole. This would mean that the community as a whole would enjoy a stable degree of prosperity. But tlie community must not he a small unit, explained the speaker. The essence of the schemo was an international basis, amounting to a "planetary patriotism” as opposed to parochial or national patriotism. There were some who believed that the schemo would fail because the colored races, being able to live on a lower scale, would undersell tho white races. That would not ho possible, however, because under the Douglas credit system the depressed races would be raised to tlie same level as tlie white races. •Every man should have the chance to develop the hidden divinity in him. There was a new era on tlie way, said Mr Lockett, and in it, he felt sure, there would ibe a prominent place for the wonderful genius of Major Douglas’ 'scheme. In reply to a question, Mr Lockett, stated that the Douglas credit scheme had been tried and had worked successfully on the island of Guernsey. For years it had operated with success there, until a banking system was set up there and spoiled tlie credit scheme. It lia'd also been tried in Soviet,' Russia, and in other smaller nations, and Wherever it had operated it had been successful. j

Votes of thanks to the speakers and to the chairman 'Concluded the meeting-