CURRENCY PROBLEMS

Poverty Bay Herald, Volume LX, Issue 18181, 31 August 1933, Page 2

CURRENCY PROBLEMS

DEBTS AND INTEREST ' 1,1 DOUGLAS CREDIT SCHEME ‘‘NOTHING PREVENTS ADOPTION” * The assertion that there is nothing: in the constitution, of New Zealand, or in the Douglas credit scheme itself, which should stand in the way of the adoption of Major Douglas' proposals in New Zealand, was made by Mr. James Morrison, in tho course of an address delivered last evening, before a good attendance of currency reform enthusiasts / and others interested in tho problems of the day. Mr. James Morrison gave an interesting outline of how the Douglas proposals would work, if applied in this Dominion, but contenxled that until the existing capitalistic control finance jandL distribution ife broken down, there could be no real progress along tho road of recovery from the present economic ills of the world. The meeting was presided over by ‘Mr. R. Scott, who in introducing the speaker referred to historical examples of the failure of official expert opinion and action, which he claimed stood behind all opposition to the proposals for currency Teform In his opening remarks, Mr. Morrison pointed out the difficulty in securing any change in the monetary system while the control of finance and distribution rested in the hands of banks and similar capitalist agencies. Economists of the recognised order were not moved by anything but a set of established rules, he held, and adherence to these rules had, in tlie opinion of many people, led the world into the troubles from which it seemed only now to ho emerging slowly. Constitutional reform of tho currency laws was possible and desirable, he held, and until it was undertaken, the forces whica bad been responsible for the-framing of’ the present laws would continue to dictate to the people regarding the disposal of their goods, and) the profits, if any, of such disposal. The ownorship of currency, be continued, was tho pivot upon which all the business of to-day was revolving. The necessity for making a profit on investments" governed the whole course of business, but the idea that industry could return profits on ate ; present capitalisation was rallacious. Prior to the war, the national debt harl been comparatively small, and tho withdrawal of money from indus-

trial chauncls for debt service was not felt seriously, but with the immensely greater debt accumulated during the war period, and overcapitalisation of industry during the boom years, it had become impossible to secure profits on the nominal investments. A prominent factor in the condition of New Zealand to-dav was that there had never been a rea. effort to meet the national debt, and that year after year the debt had piled up, until after 33 years of prosperity the country was £200,000,000 further in debt than at the start of that period. An argument advanced against the Douglas proposals was that they would moan inflation, Mr. Morrison continued. That contention was not justified, for the cost of furnishing e red its under the Douglas scheme would be infinitesimal as compared with tho cost of issuing notes through the existing financial structure. Note issues were simply a convenience to avoid the necessity of transferring sums of real money, which was based on gold. The position had arisen, however, in which gold had to be sold to another country to permit us to buy our own products. The Douglas system, based upon earnings and not upon gold reserves, would enable New Zealand to have its own currency and maintain national independence. The speaker foresaw that upon tho return of tho Prime Minister, the eentral banking system would be introduced in New -Zealand. He considered that this would mean tying New Zealand to an international system of capitalistic control, with a temporary prosperity but an eventual decline into slump conditions as bad as, those of the last' three years, if not worse, and a wnallor chance of recovery. For . any temporary benefits received, the country would have to pay, in the future, a tremendous pro-, mium. The speaker answered a number of questions in regard to the application of the Douglas scheme, and was tendered a hearty.vote of.thanks for his address. ————*—