DOUGLAS CREDIT

Poverty Bay Herald, Volume LX, Issue 18193, 14 September 1933, Page 5

DOUGLAS CREDIT

MONEY AND PURCHASES LASING DISTRIBUTION MR. L. LEND I AN’S ADDRESS Discussing the Douglas credit scheme, ia relation to the purchasing jio.wor oi the people. Mr. Edward Lenihan gave a keenly interesting address at a meeting held last evening at the San Toy rooms, at which Mr. J. 11. Cato presided over a good attendance. The chairman referred in his opening remarks to the lack of support for the Douglas credit system so far as Gisborne is concerned, and ment'imcd that the burden ol educational ull'ort was falling upon a small number of enthusiasts. Criticism of the Douglas movement had been widespread. lie admitted, but lie held that the critics had not actually attacked the main features of Major Douglas’ proposals.

Pointing out that the main effort, of Major Douglas had been to prove that, under the present monetary system the results of industry were not sufficient (o meet tin l costs of production. Mr. Lenihan observed that this theory was i'ullv proved by the events of the present day. despite the attacks ol critics. Inilor a sound economic system, it was plain that an increase, in production should entail increased employment lor tlie working population. In New Zealand. it had been iound. exactly the opposite, Lad taken place, for the great increase in production of recent years had been coincident with a disastrous decrease in employment. The speaker referred to the shortage of all commodities which had been experienced a century ago, when the world was faced with an actual famine ol goods for distribution, and then traced Hu- developments which had overcome that, shortage, with ail era ot general prosperity. This prosperity had been followed, however, by a corresponding peak of distress, occasioned by the gradual overlapping of purchasing power by the production of goods. 10-dav many people were without incomes, and consequently without purchasing power, and the business of production was suffering as well as the rest of the community. FINANCIAL. ROWERS The speaker went on to refer to the financial powers of the hanking institutions, anti stated that as the banks had cr-eatcd profits out of nothing, it was quite within their scope to create credit, which should he given to t lie people in the form of purchasing power. J’o borrow money was simply to increase the liabilities to be faced in the future, and was merely a continuation of the policy which had brought New Zealand to its present state, but the creation of social credit was quite another thing. Labor had been displaced by machinery, and the profits from the use of machinery were being harvested by the comparatively small number of capitalists. In order to restore the balance, it was essential that the. profits of the machine, or at least part of them, should he received by the workers, whose purchasing power would thus be reinforced. Until that reinforcement was effected, industry developing on present lines must stagnate.

criticism: replied to Touching on certain criticisms of iho Douglas credit system, Mr. Lenihan referred to the statement that apart from the incomes of the producers, there were other forms of purchasing power such as that represented by salaries of civil servants. He. contended, however, that these salaries were paid out of the incomes of the producers, in the form of taxation, and that, the purchasing power exerted by such classes as civil servants was not additional, hut merely a. part of that sponsored by the producers. It was not real purchasing power, in effect. Continuing, he mentioned that the principal opponent of the Douglas system in New Zealand was an advocate of the issue of consumer credits. Those who said that the Douglas system meant inflation, he held", did not know what, they were talking about., lor inflation occurred only when currency was in excess of goods. Some Labor critics held that the Douglas system did not go far enough, hut in the speaker’s view, it might serve the people far better than socialisation. There was always a surplus of goods for distribution, and the Douglas scheme would eliminate the present difficulty represented by the lack of the tickets—bank notes—which the hanks created out of nothing, lie said. Labor people would find in the Douglas system a solution to currency problems, ho held, and would do well to enlist, with other students of these problems, under the banner of Major Douglas. After a. number of questions had been answered by Mr. Lenihan, he was accorded a hearty vote of thanks, on Ihe motion of Mr. A. Cleave, seconded by Mr. J. Morrison.