THE LEGION'S SCRIP PLAN.

Timaru Herald, Volume CXXXVII, Issue 19622, 17 October 1933, Page 11

THE LEGION'S SCRIP PLAN.

To the Editor of ” The Tlmaru Herald *’ Sir,—The New Zealand Legion abused ; arty politics, and now it abuses common sense. Its criticisms were failures, and now its constructive efforts are failures. Indeed, the Legion itself is a failure. Its attacks on party politics insulted our finer feelings, and now r its plans and panaceas insult our intelligent \ When the Legion made uncontrolled implications, it failed to supply proof; now*, with the same foolishness, the Legion broadcasts plans, and with the same ina! .lity, it fails to supply proof. Of course it is admitted that no person on earth could prove the Legion's garrulous plans. The little baby plans have a weak constitution; the weakness of their menta 1 constitution is particularly noticeable. But no doubt it is well that the Legion leaves its baby plans to die in their infancy; if the plans were not checked by Infant mortality, it is certain that they would grow into horrible degenerates detrimental to the well-being of mankind. Apparently Dr. Fea nurses one of the Legion’s little baby plans; its Christian names are “stamp scrip.” and its surname is “inflation.” Forsooth, it is a deformed little mongrel. Now Dr. Fea says that stamp scrip should really be called '‘reflation” and not inflation.

Perhaps it could. A jelly fish can be called Medusa coelenterata, but for all that, it is still a jelly fish; the human brain can be called encephalon, but even so, it is still brain—sometimes more, and sometimes less, and unfortunately, a change of terminology cannot remedy a deficiency. So we shall retain the New Zealand term “inflation,” and reject the American term “reflation.” Therefore, stamp scrip is inflation, and to some extent stamp scrip will artificially raise prices. Moreover, stamp scrip is another system by which the community can be taxed. All taxes are ultimately paid by the consumer, and the unemployed would ultimately participate in the payments made for their own financial wellbeing. And that is absurd, and so is stamp scrip. Again, if there must be a tax, there Is a general principle which says that the tax must be graduated. Stamp scrip is a flat tax, in fact, the poor would probably be compelled to make more money payments towards it than the wealthy. The less financially fortunate members in the community cannot employ credit to any great extent. Dr. Fea says much about the circulation velocity of stamp scrip; but Dr. Fea neglects an important monetary law: bad money drives good money out of circulation. To proceed further, th; Legion's local captain states that a profit of £IBOO would accrue to the persons or person issuing stamp scrip. That is bad enough, but he makes it worse bystating that private enterprise could undertake the issue. The local Legion leader has advocated various American ideas, and similarly, this idea of issuing scrip through private enterprise is reminiscent of rackateers and gunmen.

The report of Dr. Fea's Geraldine address contains some noteworthy references to stamp scrip and inflation generally. He gives credit to Major Douglas for the suggestion that consumers suffer from a shortage of purchasing power. Not only is the suggestion open to argument, but even though Douglas distorted the suggestion with his imagination, he was not the first man to make it. Certainly, Douglas has painted the idea with incorrect assumptions and fantastic remedies, but he did not evolve the idea. Say (1767-1832) evolved a theory to the effect that purchasing power was never sufficient. The same idea was put forward by- Sismondi and Malthus; it has been extended by Robertus and Marx; and it has been remodelled by Cassel, Jevons, Speithoff and Othmar Spann. Hobson and Keynes have also advanced theories on the assumption that a deficiency of purchasing power is caused by the time lag between receipt and investment. Indeed, even Dr. Fea's own favourite economist, Professor Irving Fisher, has treated on purchasing power. But Dr. Fea neglected all these authorities; he referred to Major Douglas, the sponsor of one of the most absurd and fantastic currency schemes in the world. There Is no need to ask why Dr. Fea could merely refer to Douglas; the reason is too evident. In another part of his address, Dr. Fea stated that stamp scrip had been “successfully issued” in various European towns. Dr. Fea is quite correct, but the total credit for the successful issue was entirely due to the expeditious mechanisms connected with modern printing. The town of Woergl, in Bavaria, was mentioned in the address. Dr. Fea states that the German Government ultimately prohibited stamp scrip because it was issued in that town. Will Dr. Fea state why the German Government took such severe precautions in order to prevent stamp scrip issues? If Dr. Fea can correctly answer this question, it will make us wonder why he believes In stamp scrip. “How far the Legion would go,” concluded Dr. Fea, “no one could tell.” No, to be sure. We cannot tell how far the Legion will go, but we can tell that it will go up in smoke at an early date. Finally, reference must be made to the concise criticism of stamp scrip supplied by your correspondent, D. G. Macmillan. It is very significant that Dr. Fea is “neither surprised nor particularly interested” in that criticism. It is very significant that he refuses to be interested in criticism relating to the scheme in which he is interested. Such an answer is one of the poorest answers for criticism; it is an answer too poor for further comment. Again, Dr. Fea asserts that he will welcome intelligent criticism, but that he will ignore constant obstruction. Will Dr. Fea explain the meaning of his terms? Will he state what he means by “constant obstruction," and will he elucidate his idea of “intelligent criticism"? Does he term “Pen Section’s” criticisms of party politicians intelligent criticism? By what criterion does Dr. Fea judge criticism? Evidently, we are left to assume that if criticism justly shows that stamp scrip is absurd. Dr. Fea would not call it intelligent criticism; he would call it “constant obstruction.” It would be better by far if Dr. Fta prepared himself to answer all criticism. Still more deeply, he incriminates his plan. “I am,” wTites Dr. Fea, “advocating the scheme for Timaru in the meantime, not for Kurow.” And the best part of Timaru for the scheme, is the harbour. It is past time to leave Dr. Fea. Let us hope that he will leave stamp scrip and so save himself trouble and ridicule. —I am, etc., NOTA BENE. Timaru, October 14.