CORRESPONDENCE

Timaru Herald, Volume CXLII, Issue 20503, 22 August 1936, Page 7

CORRESPONDENCE

DOUGLAS SYSTEM UNDER EXAMINATION To the Editor ot The Timaru Herald " Sir, —To your correspondents, Mr Hill and “Undeceived,” • I cannot do better than quote Marcus Aurelius: “If any man can convince me I do not think aright, gladly will I change for I search after truth, by which man was never yet harmed." As both correspondents refuse to discuss the A plus B theorem of Douglas, but prefer to confine themselves to generalities, we are entitled to infer one of three things: Firstly, neither has ever studied the theorem; secondly, they do not believe in it; thirdly, they did not understand it, when they did read it. But as we are like Marcus Aurelius — in “search of truth,” it will be worth while to see just how far the New Zealand Douglas supporters follow the teachings of the “Master.” The report of the New Zealand Monetary Committee of 1934 will prove very helpful to us. On page 57 of that report, we find the following: “The Douglas Social Credit Movement in New Zealand is apparently not basing its calculations on the A plus B theorem, as is shown in the following question and answer:

Question: “In Great Britain, payments between producers are roughly nine times as great as payments to consumers. In the United States, the figure is eleven. The resultant disorganisation of industry caused by issuing an amount of credit equal to this total of A plus B payments would surely lead to chaos?” Colonel Closey: “No, because our calculation is not based upon the differentiation between A and B. payments” . . . “deficiency of purchasing power will be the determining factor in calculating what are A and B payments.”

Now Major Douglas claims that the A plus B theorem reveals the supposed deficiency of purchasing power. His followers in this country deny this claim, and assert that the deficiency of purchasing power will define which is the A class of payments and which is the B!

Let us examine the report again—the following should prove most illuminating.

Question: “Is it necessary that consumers should have enough money to pay lor the immediate cost of producing consumption goods?” Colonel Clcsey; “No."

The report goes on to say: “This explicit denial of a self-evident truth is amazing in view of the fact that Major- Douglas himself Insists that not only should consumers’ incomes equal the cost of producing finished articles, but they should equal the cost of producing finished commodities.” What a ridiculous situation! You will remember, sir, in my first letter, I showed that if the A plus B theorem was followed 'logically, then Individual consumers would not only have sufficient money to buy the finished articles, but also the money necessary to purchase the raw material and all the machinery used in the process. Now if the report of the Monetary Committee is correct and if Colonel Closey can be accepted as an authority on Douglas, then in New Zealand we do not even need the money to buy the finished, articles. This reply of Colonel Closey so staggered the committee, amongst whose ranks there were many “orthodox” economists, that they rapidly came to the conclusion that there propositions must be accepted on faith and not by scientific demonstration. Is there any cause for wonder at this conclusion?? Here was the accredited representative of the Douglas Credit group, not only denying what every economist knows must be true, If any system is to operate, i.e. that the immediate cost of producing consumers’ goods must be distributed to individual consumers, but also denying that the A plus B theorem proves a shortage of purchasing power. We may well wonder if the cock crowed.” —I am, etc., A. J. POTTINGER. Timaru, August 20.