NEW ZEALAND FINANCE

Poverty Bay Herald, Volume LXI, Issue 18331, 24 February 1934, Page 6

NEW ZEALAND FINANCE

MAJOR DOUGLAS’ PROPOSALS MONETARY COMMITTEE MEETS INTERESTING CROSS-EXAM-INATION (Special to the Herald.) WELLINGTON, this day. Called at short notice to enable Major Douglas to give evidence before the Parliamentary Monetary Committee to-day, there was a representative attendance, including Air. Al. J. Savage, Leader of the Opposition, and a number of Wellington members, and Dr. R. Campbell Begg, of the New Zealand Legion. Major Douglas submitted a. written statement of bis proposals relating _to New Zealand, and the cross-examination became highly interesting when it concentrated, as mainly happened, on the point of the appropriation of banking assets.

Alajor Douglas suggested that every bank should make an annual sworn statement of its assets as shown on its books, and also a statement of the market value of such assets as valued by an independent authority. When it was found that tiie balance-sheet valuation was lower than the market valuation, the difference could bo transferred to an account called No. 1 suspense account. All profits earned by the bank over the amount necessary to pay a 6 per cent, dividend could be transferred to a No. 2 suspense account. Major Douglas proposed that 50 per cent, of the amount m No. 1 account should be applied to a reduction of overdrafts, debited to the banks’ customers on a pro rata basis, while 75 per cent, of the amount in No. , 2 account should be applied to a reduction or disbursement of interest paid on overdrafts. “Would this not be confiscationf’ suggested Air. A. J. Alurdoch, a member of the committee.

“There is an old Spanish proverb that lie who robs the robber earns 100 years' remission,’' retorted Alajor Douglas, who, when the laughter subsided, explained that this was not his opinion, but an old proverb. Air. W. Downie Stewart: You feel your scheme ,-s justified because you arc robbing tlic robbers?

Major Douglas: If you put these organisations into a position in which, whether they have any conscious desire or not, they are in fact in the position of recipients of unjustifiable wealth.

Air. Stewart asked if the witness in his writings accepted the fundamental British principle that one did riot disposses without compensation?

Major Douglas: 1 am not proposing to dispossess any man. Air. Stewart asked the witness to consider the case of small people who bought hank shares at the. market price. Would lie not be taking away Jin 1 f their capital at once?

Major Douglas: 1 think my answer would be that as tilings are going at present there is no possibility whatever of the present banking system continuing for any considerable length of time, even three or five years, without a complete catastrophe, and a complete breakdown of the existing system. In that case I am not taking! anything away. I am preserving half his capital. Mr. Stewart: That is on the assumption that your view of the banking position is correct.