THE FINANCIAL SYSTEM

Southland Times, Issue 25502, 24 October 1944, Page 3

THE FINANCIAL SYSTEM

Sir, —I have just listened to the singing of our New Zealand national anthem, and I wonder how many realize just how our “freedom” has been taken from us, mainly by those in control of our financial system. I am not going back to discuss the Cunliffe Commission report, or the unrestrained expansion and contraction of credit which led to the Wall Street crash, but will merely recall some of the things we have had put upon us in quite recent years. During the depression, in spite of the fact that we increased our production, we found our income reduced so that it took double and treble the quantity of produce to meet our commitments. The result was bankruptcy, repudiations, budget control. Many of us found ourselves under budget control with an allowance of £lOO a year for all family requirements. I remember when the Hon. A. Hamilton was asked if that amount had to cover medical and hospital expenses. He replied, “Yes, you want to pay your debts.” Will you allow me to quote a comment of my own at that time: “The amount is not sufficient, nor is it enough to provide for such items as holidays or education, nor for such natural events as births, deaths and marriages. Perhaps the Supreme Council of three will exercise their ‘over-riding authority,’ and see that such events do not take place except under approved budget control.” It was during these years that Mr Polson advocated the issue of interest-free production certificates to stimulate industry. An excellent suggestion, but nothing was done. Why? Mr Polson also moved an amendment to the Reserve Bank Bill to the effect that the Governor of the bank should be a New Zea-land-bom man. We know what happened. About the same time the Hon. J. G. Coates made a suggestion, if not an amendment, that farm mortgages should be written down so that farmers would still have a 20 per cent, equity for themselves, but again this was dropped like a hot potato. Why? Let us now turn to a local problem. In 1935, owing to a very bad season (much worse that the present one) hundreds of dairy cows died. In some cases whole herds died. A meeting of farmers was held to see what could be done. Only one worth-while suggestion was made: that the Government be asked to grant free railage on hay which was available in Canterbury. But no, it was pointed out that the railways had been handed over to commissioners with instructions that they (the railways) had to pay at least 2 per cent. Therefore, there could be no concessions. The cows could die, production go down, farmers go bankrupt; but 2 pel' cent, must take precedence. At that time an officer from the Treasury Department spent some time in Southland for the purpose of offering fresh finance to farmers to replace their lost stock. However, I have it on good authority that not one penny piece was ’ent. The department wanted security over the new cows, over the old cows, over the factory cheques and perhaps collateral security over the farm. Now what does all this show?— that the demands of money and those who control our money take precedence over the most urgent and vital needs

of the people. I know I will be told that all this is in the past, that the present Government has changed all this, and that the National Party is a new body of men with definite intentions not to make those glaring mistakes again. How can either party say this without taking complete control of the issue of our currency and credit? About 1934, quoting from the Southampton Chamber of Commerce Report, I drew attention to two “tin tack” proposals: 1. That the issue and control.of currency and credit shall be in the hands of a national authority directly responsible to the Sovereign and his people. 2. Money supply should be governed by the real credit of the community as represented by its productive capacity. Had these proposals been put into effect, had our incomes been measured in terms of production, money would have been available for any worth-while cause. B. C.