DOUGLAS SOCIAL CREDITS

Taranaki Daily News, 19 January 1933, Page 8

DOUGLAS SOCIAL CREDITS

ADDRESS GIVEN AT HAWERA PRESENT SYSTEM ANACHRONISM. CONSUMPTION AND PRODUCTION. Claiming that the present monetary system was obsolete and should be replaced, Dr. G. Smith, Hokianga, addressed a. representative audience of 250 at Hawera on Tuesday night. He advanced briefly the claims of the Douglas social credit scheme to consideration. The Mayor, Mr. E. A. Pacey, presided. Introducing the speakers, Mr. Pacey said the people were passing through a strenuous phase out of which the best brains were trying to show the way. They had turned several comers, but seemed to be as badly off as ever. Mr. Hall Thompson, secretary of the Hokianga Douglas Credit Association, briefly introduced the sAiject. There was a general idea that the proposals were impracticable and only a dream. He thought the reason was that the proposals seemed too good to be true. The Douglas movement was world-wide, being dormant in New Zealand until about four years ago, when the Auckland Chamber of Commerce toured North Auckland. Dr. Smith warned that party that New Zealand was facing a national crisis when butterfat would fall to 6d. His prediction had been then treated as a joke. Dr; Smith said he treated the size of the audience as a sign of the times, for many people were in difficulties and unhappy. In Auckland a big percentage of the children were 'under nourished and there had been a huge decrease in milk consumption. He had visited an unemployment camp in North Auckland where the men were short of boots, blankets and clothes, though they were well fed. Representations had been made without avail except that the Government appealed to the farmers to give them sheep skins for blankets. ' .SUCH A STATE UNNECESSARY.' If that state of affairs was - necessary New Zealand could and would not bear it. He ■ claimed that it was not. There was plenty of wool, and the mills were only working half-time. The same applied to all the essentials of life. Seventy per cent of New Zealand’s requirements were available in New Zealand. The Government said it had no money.' That meant that the goods in New Zealand could not bt? distributed because there was no money, which was not real wealth. That pointed to the monetary system as being responsible'for the men having no blankets and the children of Auckland not enough food. What could be more absurd than a man being hungry and ragged because he could not get enough work for which there was no need as there was plenty of everything? Money was a means of distribution. The money belonged to private banks, to private individuals. It was no good his talking reform unless his hearers realised the absurdity and inhumanity of the present system. What prospects had the young people of to-day? . How would they account for this silly age? They had gone through the age of scarcity and were living in the age of plenty but Were not allowed to use it. In Canada they were burning wheat. In Brazil the Government had a serious problem in getting rid of surplus coffee. They wished to burn it, but this would cost money which the bank would not advance. They threw it into the sea, but an enterprising man pulled it out and sold it at half the ruling price. They were ploughing in cotton .and smashing machinery in England. It would come to that in time in New Zealand.'. • The banks talked rationalism, but that was just sabotage. The capacity, to produce was increasing every day, and America,-for instance, - could supply all the world needed in manufactured goods. DISTRIBUTION PROBLEM. Was. there not a method of distributing all this wealth without hurting anybody? Many socialists said, the poor were poor because the rich were rich. If all the money were .evenly distributed no one would have , anything to speak of and unemployment would increase. It was no. good taking from the “haves” arid giving tb the ‘have nots.” The Douglas system could not be understood unless one understood the present system, of which many business men were profoundly ignorant. There was a conspiracy of silence. Whenever reform cropped up the Government consulted the bankers; that was like asking the brewers about prohibition. Bankers, of course, knew more about the present system than anyone in the 'world, and to suggest that the Government should corifrol it. was absurd.. Dr. Smith contended; however, 7 that the machine was an anachronism. It worked well in the age J of scarcity but not in the age of abundance. Recommendations from farmers to the Government telling them how to work \ the system were ridiculous; if the bankers could make the system work they would. Even Mr. Mon-

tagu Norman (Governor of the Bank of England) said he could not see more than a step at a time. A new machine was essential.

Sir Otto Niemeyer came to New Zealand as a dictator on behalf of the English bondholder. He urged reduction of wages and lower consumption. The Government accepted his orders without a protest, with the result that New Zealand had been called “Sir Otto’s good little boy.” But for his instructions there would have been no strikes, no hungry children in Auckland, and no cuts in wages.

When a deputation of monetary reformers waited upon the Government the Prime Minister (the Rt. Hon. G. W. Forbes) admitted he knew nothing about money. Not that any other Government would be any better, since New Zealand was a democracy, the Government of which go no farther than the rank and • file. The movement. had to come from the people. , ATTENTION DISTRACTED. The money monopolists encouraged the struggle between capital and labour as it distracted attention from the real villain of ■ the piece. Meanwhile the people were content to take orders. The banking system of America controlled the whole system of the world. There was no doubt that the handful of men who controlled the system thought they were right and honestly believed the depression was good for the world. It was expected that in New South Wales there would be a majority in favour of the Douglas scheme in 18 months. Major Douglas said there was never enough money paid in. wages ' and dividends to buy the goods produced. It was a question of underconsumption. The Prince of Wales agreed that a mal-adjustment of distribution was the trouble and that the problem' was to bring consumption and production together. This was not a simple, but a possible, task. Mechanical progress was astounding. Everywhere the machine was putting men out of work and causing infinite misery everywhere. Dr. Smith suggested using the machines properly. For Scotland Major Douglas suggested that every person should draw a national dividend weekly, amounting to about £3OO per family per annum. To get over the deficiency in purchasing powers he suggested that manufacturers should be subsidised 25 per cent. With the dividends and 25 per cent, discount he considered all poverty would be done away with. A LEDGER ENTRY. Where would the money come from From where it did to-day, a ledger entry,■ with the accumulated wealth of the country -as backing. For New Zealand Major Douglas suggested the subsidising of primary and secondary producers. Butterfat'would be brought up to, say, Is. 6d. a lb., and so on. He was certain the thing could be done, and men who knew far more than he did thought so. It was not so very pretentious because the goods were there. Major Douglas showed that the depression was due to an error in accountancy. The scheihe would not hurt anybody.' Surely to goodness physical facts were more than figures in a ledger? Answering a questioner, Dr. Smith said the banks could issue as much money as they liked. In England at the begining of the war the banks had issued £800,000,000 more money than they had, and this deficiency was covered by Bradburys. On the strength of a deposit of £lOOO the banks would advance up to £9OOO, or even as much as £17,000. The amount of money in existence varied only-with the policy of the banks. A woman questioner asked whether there would not be a shortage of labour, and thus a scarcity of wealth, under the Douglas scheme. The lecturer said this could not happen because of the vast potentialities. The rate of exchange fundamentally depended on what the pound would buy in its country of origin.

The banks 'would still function and would act as the machinery for operating the system. The scheme encouraged industry and individualism, the object being to give capitalism more elbow room. Everything to-day was all right except the monetary system. If a man had a small private income he worked to earn more, so that the scheme would not encourage laziness. Mr. A. C. Lovelock then moved: “This representative meeting considers that the credit of: New Zealand belongs to the people and not to the private banks and asks the Government for a full inquiry into the monetary system.” This was seconded by Mr. R. D. C. McNeil and carried.

: A .vote of thanks was moved by Mr. P. O’Dea, who said that even the most conservative realised the present system was badly shaken.