Social Credit Column.

Rodney and Otamatea Times, Waitemata and Kaipara Gazette, 19 February 1936, Page 8

Social Credit Column.

(Pttblished by arrangement.)

(Conducted by the Warkworth Branch

D.S.C. Movement of N.Z

Monetary Committee Report

Memorandum of Dissent [Continued from last issue]

Growth of Debt

The explanation, we submit, lies largely in the facility with which private banks were permitted to create credit at no cost to themselves to be borrowed by Governments as debts carrying the burden of interest. Had GOVERNMENTS THEMSELVES CREATED these moneys, revenue could have been allocated to the retirement of so much of that money as was superfluous, instead of that revenue being paid in interest, which still left the original debt owing. Britain may be taken as an example: The Bank of England seems to have come into existence essentially for this purpose of expanding itself by the growth of a national debt. frior to 1694, when the Bank of England was established, Britain had very little national debt. Within three years its debt amounted to over £3,000,----000, The wars of William 111 added £15,000,000, Queen Anne's wars £37,000,000, the American War £121,000,000, the French wars of 1793—1815 £604,000,000, the total in 1817 being £848,000,----000. Reduced by sinking funds to £635,000,000 prior to the Boer War, it became £7,830,000,000 two years after the close of the recent war.

Why Napoleon 'Left no Debt' That all this debt is unnecessary is shown by the fact that France, a country poorer and far less advanced industrially than Britain, fought her long wars under Napoleon without Budget deficit, without depreciation of currency, and without incurring indebtedness, as Napier, in his "History of the Peninsular War," frequently mentions.

"The Cambridge Modern History," says, "Never under the Empire or under the Consulate was recourse had to loans properly so called. 'That method,' declared Napoleon, ' ... is both immoral and disastrous. It insensibly undermines the edifice of State, and exposes one generation to the curses of the next.' " Napier says, "Napoleon rejected public loans which are the very lifeblood of State corruption. He left no debt." Such is the striking difference between results in a country of a highly developed private banking system and a country that had not learnt to develop it so highly or, at all events, to use it so largely.

Evidence of Major C. H. Douglas.

The most notable witness that appeared before the Committee was Major 0. H. Douglas. Because of the limited time at his . disposal and for the reasons appearing in the correspondence that passed between Major Douglas and the Committee this witness did not give evidence concerning the theories associated with his name and which are developed in his text-books and other publications, but confined himself to such suggestions as he thought might be usefully made on the Committee's assumption (which he did not accept) that the present financial and monetary system was essentially sound and not in need of fundamental change. This witness pointed out that the banking and insurance organizations are closely interlocked in their control of the financial system, and that the creation of reserves, and especially of the sort called "secret" reserves, on the part of banks and insurance companies was a process in which wealth was demonetized and the money in circulation reduced—in short, a deflationary process. He proposed that these reserves should be again monetized and that they should be distributed in a manner which he set forth, thereby dealing with the financial institutions as they now deal with the public. As the proposals made by Major Douglas before the Committee were made upon an,assumption which he 4id not himself accept, and which' we doynot accept—viz., the soundness of, thie present sys-

tem —their main interest lies in the light /they throw on the effect of the present routine of banking and insurance companies upon the public welfare and the necessity for putting money into circulation otherwise than as an increase in debt. :

[Report continued in next issue]