LOCAL MARKETS VALUE

Taranaki Daily News, 9 November 1935, Page 10

LOCAL MARKETS VALUE

DEMOCRAT TRADE POLICY EXPOSITION BY DR. G. J. ADAMS. LARGE MEETING AT HAWERA. Four hundred Hawera electors gave Dr. G. J. Adams, Democrat candidate for the Patea electorate, an attentive hearing last (night. He outlined the policy of the party and attacked that of the National Government Party. A lone interjector was resolutely ignored but after the address Dr. Adams received numerous questions, many of a bantering nature. The Mayor, Mr. J. E. Campbell, presided. A vote of thanks was carried. Dr. Adams gave an emphatic denial to the suggestion that he had been responsible for the reduction of nurses salaries while he was a member of the Wanganui Hospital Board, that he had refused charitable aid and that he had been responsible for the number of hospital beds being reduced by 30. Dr. Adams dealt particularly with trade and the party’s policy in this respect. He contended that the Government had never realised the value of the New Zealand market. Trade had become so complicated by manipulated exchange and sales tax, ana so hampered by general taxation and decreased spending powers of the people, that producers did not know how they stood, people’s confidence had been broken and unless evolution was accepted, revolution would result. The position could only be saved by removal of the sales tax, reduction of general taxation, removal of gold export tax, restoration of spending powers of the people in general, and the civil servants, workers and unemployed in particular, removal of the manipulated exchange as soon as it was economically possible and restoration of the confidence of the people generally. It had certainly never been appreciated by the National Government that the most valuable asset the Dominion had was its internal trade, a trade Which was in the people's own hands to handle and which involved half of their products. This market was dependent on the spending powers of the people within the Dominion. The impositions he had just spoken of had gone a long way to damage this market. BOLSTERING 'INTERNAL TRADE. It was much more valuable to the Dominion to bolster its internal trade than to seek markets in China, Japan and other foreign countries, markets that had never been in New Zealand's favour in regard to trade ratio and markets that might go a long way to damage trade relationship with Britain. New Zealand must never do anything that would jeopardise the British market, for there was the other half of New Zealand’s trade. The trade ratio with the British market to-day was 28 to 100 in New Zealand’s favour. These were the figures that counted, and on which consideration or otherwise for New Zealand’s export trade would be based at the next Empire trade conference. The British markets were threatening New Zealand with a levy on exports and New Zealand must also expect a reduction of the quantities they would take, unless it reduced that 28 to 100 trade ratio and bought more goods from Britain. This could not be done to a reasonable extent unless the 25 per cent, exchange barrier was removed. Mr. Coates had expressed himself joyfully that the Democrats could not take the exchange rate off. Mr. Coates had got things hopelessly tangled, but they could rest assured that the Democrat Party would put. the Parliamentary machine in order and would restore the power and privilege of the people to govern themselves, and would restore to Parliament its rights of government. The Democrats had men in their ranks quite equal to if not much better than Mr. Coates, and knew what could be done. Farmers need have no concernment; their position would be very greatly improved. They would get the same nett sum they were getting to-day, and it would be distributed more fairly where it was required most, and when it was required most. That the manipulated exchange was not conscientiously supported by Minis-, ters and members of Parliament was conveyed not only in the fact that 11 members signed a petition to the banks praying for them to oppose any manipulation of exchange, but in the words of the Prime Minister, uttered when the 10 per cent, exchange was introduced by the banks, and equally true of the 25 per cent, exchange. Those words of Mr. Forbes were: “There is no doubt that the high rate of exchange and especially the uncertainty as to the future movements in the rates, are a considerable factor in the business stagnation that prevails. Further, the exchange rates have seriously affected • our credits abroad, increased the cost of new borrowing, added a further 10 per cent, to the weight of interest payments abroad and prevented prices and cost of living falling as much as they would otherwise have done. It is true that exporters are receiving the exchange bonus of approximately 10 per cent., but it is not very long' before any temporary advantages are cancelled out in the higher rates of taxation, higher costs of goods and the general reaction from slackness in trade.” MR. COATES’ REPENTANCE. Of the blunder that was made by the introduction of exchange the repentance of Mr. Coates in his memorable memorandum of 1933, four months after the introduction of the 25 per cent, exchange rate, gave most impressive proof. It read as follows: “It is fair to admit that when< Australia, New Zealand and Denmark) have all raised their exchange rates and when all must porn- their butter into over-supplied English markets, the buyers there are able to set off one seller against the other and force down prices. It is a buyers’ market, and, part of an export bounty will tend to pass to the buyers. In other words the advantages from the exchange rise is being defeated, in part at least, by the over-supply of the market.” The party's mortgage provisions provided another security for farmers. If a farm could not carry the mortgage it held the mortgagee would be better secured and the mortgagor would be able to pay his interest and make a living under the Democrat scheme which worked as follows: “Say a farm is mortgaged at £5000; it will pav interest and provide a living at. say, £3500: therefore our policy will make £3500 a live mortgage and interest bearing and £l5OO a latent mortgage with no interest. Now if prices rise 10 per cent., £5OO on the latent mortgage automatically will become a live mortgage: another 10 per cent, rise, another £5OO will become a live mortgage. The fall in market prices is recorded similarly in the reverse order. This. I think you will agree, provides better security for the mortgagee, a more secure living for the mortgagor and a more equitable share for both of th° benefits of rising markets." Unemployment had been so thoroughly dealt with during these past few weeks that there was no necessity, for him to elaborate on the Democrat policy and its efficiencv. It was sufficient to say that it had been °nHorsed bv the' organ of the Nat’onelists in th" following words qnofed from 1b" Dominion: “It follows that industrial expansion beyond the point reached in 1929 will.be

necessary before unemployment can. be finally overcome; and there is a very / strong case for State action to stimulate that expansion. In this connection the policy of the Democrat Party deserves careful examination; it is to be hoped the Government will not be too proud to take a suggestion from that source. . . . Every constructive proposal directed towards the permanent re-employment of our idle thousands deserves a warm welcome, irrespective of its origin.” The National Government, Dr. Adams said, had not shown a vestige of business acumen in its methods and Vain endeavours to deal with the problem. In fact its legislation had cheated unemployment in every direction by allowing dis- ! missal of employees for the purpose qf taking on subsidised labour, by reducing' the employing powers of the people, through burdensome direct and indirect ■ taxation and exchange manipulation, etc. The Democrat policy was constructive, sound and curative, and this nobody could deny—even the party’s bitterest ; opponents having conceded that much. Lhey should not be troubled with unemployment in the Dominion at all. It was ' not an industrial country handling the ; luxuries or non-essential things of life. It produced the bread-and-butter lines of life, the very necessities of life, which were practically in as great a demand . in times of depression as in good times. . Had the position only been grasped by . the National Government, trade not been . juggled with to the extent it had been, . and a little more consideration been shown in regard to taxation of the peo- ; pie, the unemployment problem would . never have worried New Zealand at all . and the depression would have been , much less felt. ADDRESS AT RAPANUI. i EXCHANGE RATE ATTACKED. The Democrat policy as it applied to the farmers was outlined by Dr. G. J. Adams at Rapanui on Thursday evening. There was an attentive audience and the : speaker was asked a number of questions. Referring to the unemployment policy, Dr. Adams said it seemed incredible that unemployed should be taxed for their own relief and that the women of the Dominion should be called upon to con- : tribute to the tax when they gained no benefit from it. ( Dr. Adams briefly outlined the disad- ’ vantages that the exchange rate created 1 and alleged these outweighed the advantages. He detailed how the exchange i “took the bottom clean out of the but- . ter market.”