SOCIAL CREDIT DEBATED

Taranaki Daily News, 8 September 1934, Page 9

SOCIAL CREDIT DEBATED

VOTE FOR COLONEL CLOSEY MR. SHEAT THINKS PLAN UNSOUND INTEREST OF HAWERA AUDIENCE. LARGE NUMBERS REMAIN SILENT. Holding that the Douglas Credit proposals for the restoration of prosperity were economically unsound, Mr. W. A. Sheat, 8.A., LL.B., F.R.E.S., Pihama, failed to convince an audience of close on 500 at the debate at Hawera on Thursday night, with the result that Colonel S. J. Closey, M.C., V.D., Auckland, secured an 11-vdte margin. The majority did not vote, however, the results being 98 for Douglas Credit, and 87 for. Mr. Sheat. Mr. P. O. Veale, 8.A., M.Sc., presided over the debate, which aroused the keenest interest. By agreement, the debaters-were allowed 30 minutes for exposition, a further 20 minutes for reply, with a final seven minutes for Mr. Sheat to sum- up the arguments. Though now and again each indulged in “wisecracks,” generally the rules of debate, were strictly preserved. Leading off, Mr. Sheat. said the interest in monetary reform, even though supposed to be backward in Taranaki, was really very much alive. The people were faced with the economic problems of unemployment and of poverty in the midst of plenty. He believed there was something radically wrong with the present system. If the people were living in a desert, or in poverty of. life, then the present system Would be justified. The Douglas Credit adherents, he said, claimed that the' sole cause was monetary. It was, however, the policy of deflation, deliberately enforced by those in charge. In money, they might be poorer, but in real wealth, the position had become better. If Douglas was correct in his analysis, then it was the duty of every thinking person to support the movement. If he was not, then his analysis would lead down a blind alley. He believed that the Douglas theories were defective.

The Douglas claims was that the depression was due to a chronic shortage of purchasing power, and also that during the process of production costs were loaded into the price of the goods which were not represented by purchasing power to buy the finished commodity. The first would be offset by the issue of a National Dividend and the second by the inauguration of a price discount. His contention, said Mr. Sheat, was that, due to a, faulty analysis, the proposals were unsound. While it is true that there was a shortage ,of purchasing power for many, another section had more than it knew how to use. AMOUNT ON FIXED DEPOSIT. The amount on fixed deposits in the' trading banks at present was greater than at any other time in the history, of the country, and if Douglas could not show why fixed deposits could not be utilised, it is futile to assert that there was an absolute shortage. The fixed deposits in the 12 months prior to the end of March, increased by nearly £5,000,000 to £39,500,000. The deposits represent the surplus purchasing power of those who had too much. Illustrating by diagrams, the Douglas claims of loaded costs, Mr. Sheat pointed out all could conceivably be used for purchase. What really happened was that an attempt was made by one section to -withhold some of the profits of their section of the deal and to save or invest it. That was the reason for the deficiency. The tendency was for too large a portion to go into the hands of people who did" not'want it for their immediate needs. He. was not denying that some ' should be saved. There were many people, he said, who were permitted to receive out of the national; income less than they paid into it, and many who received more than they paid in.' New Zealand had attempted to regulate wages On the basis of what would keep the worker alive and quiet, and not on the value of the work he produced. Until distribution was made correctly, then Douglas’ proposals were, .idiotic. The proposal to issue £120,000,000 in dividends was unsound. .Until. New Zealand faced the facts of the loss of purchasing power through fixed deposits, then it would not see the end Of /the. depression.

Douglas in 1917 had prophesied that the time would come when there would be mountains of goods and no buyers, said Colonel Closey, and when there wduld be millions out of work.’Colonel Closey quoted American economists, including Dr. Nicholas Murray Butler, who had said the world owed 27 per cent, more than it was worth.

■The proposals of Douglas Credit were: That the people must have self-govern-ment in money, taking back what they had lost. To do this a National Credit authority of nine persons would be elected to have complete control of all moneys. Answering to the authority would be a controller of currency and three divisions; the issues; the security valuation; and the foreign' exchange and purchasing division. NOT ONE PER CENT. BETTER OFF. Not 1 per cent, of the community was richer than two years ago. The fixed deposits were only a fraction of what had been lost. The unemployed going through the . streets saw the articles which they had helped to make, but for which they had no money, to buy. Then was the bargaining with the future by time-payment sound? New Zealand was £7,000,000 short in purchasing power, but they were not concerned with the causes but with the facts. The primary producers sold on a collapsed market. What did they need t 6 worry so long as they buy as cheaply as we sell? They could pay the dairy farmer Is 3d ’ a lb for butter and lOd a lb for crossbred wool. The farmer would then remain steady and bring every section up to a level, leaving the purchasing price stable. “We do not pretend,” said Colonel Closey, “to be authorities on whether men are getting more than they deserve. We want a properly working monetary machine. If you can’t trust us, then our people are hopeless. Our proposals have stood examination for three years, and if tlie people are not fit: to be trusted, it is hopeless and everything else is hopeless.” Colonel Closey had dodged the main issues, said Mr. Sheat. New Zealand might be £7,000,000 deficient, but . the fixed deposits of nearly £40,000,000 represented purchasing power. If it was possible to tax the man in the breadline 1_ in the £1 then it was surely possible to take from wealthy people more than that. If the Douglas Credit proposal to issue £7,000,000 were carried out, then the money in the bank would not be worth paper. Then obviously the work of thrifty people was to go by the board. Somewhere there was a vast reserve of purchasing power. He charged Colonel Closey with repudiating Douglas’ principles as far as the National Dividend was concerned by disagreeing with the statements of Mr. H. Atmore, M.P., who, had stated that it was proposed to pay a dividend of 30s a week to every man, woman and child in the community. New Zealand had to pay enormous tribute to overseas nations, and that was one of the main reasons for the depression. New Zealand was the only country in the world which

had not asked for concessions simply because it was too proud. Many of Mr. Sheat’s remarks were untrue, said Colonel Closey. He had not repudiated the Douglas principles. Douglas- had said that the first essentialwas to get an independent audit of banks. If people had control of money they had control of everything. If there were 80,000 or more men on less than. £1 a week, there must be less purchasing power. “We are within reach of success,” he said. “A total of 90 per cent, of the people north of Taranaki and 50 per cent, below' are Douglasites.” w Mr. Shea., in the final speech, said that control of land and capital was more important than control of money. Three years ago the annual meetihg of the New South Wales Douglas Credit movement had predicted that Douglas Credit would hold sway in Australia within 12 months. On the chairman calling for a vote, the Noes had it by a large majority. A show of hands was then taken. A vote of thanks to the speakers was moved by Mr. J. W. Snowdon, and both speakers paid tribute to Mr. Veale’s chairmanship.