The Southland Times. PUBLISHED EVERY MORNING. “Luceo Non Uro.” WEDNESDAY, NOVEMBER 6, 1935. NOT ENOUGH DETAIL

Southland Times, Issue 22731, 6 November 1935, Page 6

The Southland Times. PUBLISHED EVERY MORNING. “Luceo Non Uro.” WEDNESDAY, NOVEMBER 6, 1935. NOT ENOUGH DETAIL

While the Democrat leader spends the greater part of his time vilifying Mr Coates and in an effort to show the country that the Minister of Finance does not possess a single political virtue, being corrupt where he is not a fool, and a man incapable of doing anything right, Mr Savage tries to woo the electors with monetary reform. The Labour Party’s forces, battle-line and skirmishers, are engaged vigorously in this effort, and even the precious term “usehold” which was so prominent four years ago, is forgotten in the campaign for monetary reform, which Mr Savage declares, is paramount. Recently he said there were a thousand and one minor issues, but unless the money problem was solved there was little hope of finding a solution for the other problems. Thus Mr Savage subordinated all economic questions to the single issue of exchange and monetary management. For Mi- Savage it would appear, the real issue is whether private banking corporations shall continue in control of credit and currency or whether the State shall take control. The funny part about this “only issue” is that the New Zealand Government does control the currency and has always done so. The amount of currency the banks could put into circulation was subject to statutory regulation, the private banks acting more or less as agents for currency issue. When the Reserve Bank came into being the management of the currency passed into its hands, but the Reserve Bank operates under regulations laid down by Parliament and there exists a measure of control which is effective without delivering the entire structure of finance into the hands of the politicians as a plaything. The State is the largest depositor and the largest borrower, the best client, so that it cannot fail to have influence with the Reserve Bank. Mr Savage’s groan of disapprobation, echoed in every constituent, will be about private capital and one or two members of the Board of Directors not appointed by the Government; and the real reason for this groan is that this small measure of private co-operation is enough to ensure that the politicians cannot play ducks and drakes with the Reserve Bank, and the entire financial structure without some effective opposition being opposed to it. When these people talk of State Control, and of democratic control, every elector should translate those terms into “control by the dominant political party for the time being.” Part of the Labour Party’s case is that the banks set about hurting themselves by injuring their clients. If all the things said by these monetary reformers were true the banks would have failed years ago through their ruination of all their clients. This is just as absurd as the suggestion that the banks manipulate the credit and currency according to the whim of a moment and without any thought for the effects on the economic condition of the country. What the Labour Party is doing is trying to seduce the public into giving it control, using as its bait the promise of State Control, which would mean control by Mr Savage and his colleagues as a first step to national Socialism. Many of the statements on the monetary question are vague, despite the fervent rhetoric with which they are accompanied, and it is significant that Mr Savage, who used to want us to take over the banks, is now seeking

a national credit authority whose duty would be to provide a money service sufficient to give effect to the will of Parliament.

In addition this money service

should be sufficient to enable the people to purchase at economic prices the full value of the Dominion’s production.

Mr Savage does not go further. Mr Hislop is a party leader who declines to answer questions; Mr Savage is one who does not go into difficult details. He does not explain what is meant by “economic prices,” or “full value,” or who is to determine these. Nor does he say how this money service is to put money into the pockets of the people. Ideas have been borrowed from Major Douglas, and vamped to fit into the Labour Party’s general scheme, though Major Douglas insists that his scheme is opposed to any form of Socialism. There is one term, however, which every elector can understand for himself, the will

of Parliament. That wonderful phrase means the collection of politicians who have the largest number of seats in the House and who will talk of the “will of the people” so long as it enables them to stick there. At present the politicians have a limited control, their power to interfere with the financial machinery is restricted, though it is very real; but under the Labour Party’s proposals the financial structure goes into the hands of men whose talk shows their readiness to yield to every gust of popular pressure, to accept public opinion however illinformed it may be. This “money service,” which is not explained, except in Mr Savage’s vague terms, is essential to the other great idea, “guaranteed prices” by which farmers are to be provided with bounties, costing nobody anything. When the Labour Party’s pen-men write of the Swedish effort they are referring to its currency measures; but it must be remembered that the references to what has been achieved are taken from the statements of the Government claiming credit where it can. Unemployment figures, it has been shown, can mean anything provided the points of comparison are judiciously chosen. Mr Jones and Mr Marchant discovered that the publication of all the figures over the period involved showed the statement that wages cuts caused unemployment (not “the unemployment), supported .by the Labour Party’s specially selected figures—Mr Edmond has used them in Wallace —to be absolute nonsense. The Swedish unemployment figures show that before any currency change was made the unemployment peak registered 1.46 per cent, of the population, and now the government says it is down to 1 per cent., a fall of 31.2 per cent., or less than one-third. In New Zealand the peak has been reduced by nearly half! But it must be remembered that even in Sweden borrowing costs money, and blunders must be paid for. . Finally, no one knows how this money service is to be operated, nor do the experts. If Mr Savage thinks of lifting the Swedish method into New Zealand holus-bolus he is embarking on a dangerous, a ticklish experiment, because conditions in the two countries are not the same. Only a small difference would be enough to cause serious trouble, and our prosperity would be tickled to death. More should be told by Mr Savage—more detail and less rhetoric.