LONDON CREDITS

Timaru Herald, Volume CXLV, Issue 21088, 14 July 1938, Page 12

LONDON CREDITS

Cause of Shrinkage Statement by Prime Minister Address-in-Reply Debate Ends By Telegraph—Press Association WELLINGTON. July 13. The Address-in-Reply debate was continued in the House of Representatives this evening by the Prime Minister, the Rt. Hon. M. J. Savage, who was greeted with applause. He said that he had frequently made public reference to the abundant signs ot prosperity which were everywhere apparent. He would not take time to report them now. but there were some sure signs which were always manifesting themselves, namely, expenditure on such items (they could call them luxury items if they liked), as radios, motor cars and the totalisator. London Funds Speaking of New Zealand's London credits. Mr Savage stated that the Government had been charged with having bought too freely from Britain. The Hon. Adam Hamilton: No. Australia. Mr Savage: Britain was the country mentioned. Continuing, Mr Savage said that those who made critical references to the fall in New Zealand’s London credits were in effect saying that we bought too much from Britain. By what other means could we get the benefit of our increasing exports? It

was a well-established fact that only by overseas purchases could we obtain payment for our oversea sales. It might be from time to time that there would be fluctuations in the relationship between our sales and purchases, but in the long run our purchases must balance our sales. Admittedly imports had increased in the last two or three years, but that was largely the natural consequence of increased exports during preceding seasons. “I should like to make it clear generally and to newspaper editors in particular,” said Mr Savage, ‘‘that I am aware that the increase in imports has also meant using up a proportion oi our accumulated sterling funds in London. This was accounted for largely by the increased imports of capital goods, the type of goods which the mistaken policy of the Coalition Government forced us to go without during the depression. That accounted for the unnecessarily large accumulation of sterling assets during that period.” Mr Savage continued taht the cutting down of expenditure during the depression resulted in the accumulation of many millions of pounds which should have been used instead of being hoarded up. The result was to-day that we had to spend some of that money to make up arrears in our purchases of capital equipment. Figures for the period 1931-33 were worth quoting. They told their own story. In this period we had some £40,000,000 in London at the very time when more than 79,000 men were unemployed in New Zealand and at least one-sixth of the population was on the breadline. Bank advances had declined from £53,500,000 in 1930 to £41,000,000 in 1934. During the corresponding trading years imports declined from £49,000,000 to £26.000,000 simply because the people of the Dominion were too poor to reclaim their exported wealth. It had often been claimed that the ' increased prices of our exports were solely responsible for the improved conditions of the last two years. It could be justly claim‘•d that if the Coalition policy of wages cuts, unemployment and general credit contraction had been maintained, social and economic conditions to-day would show little improvement and the accumulation of London funds would be greatei than ever. Unless the people of the Dominion were able to buy at home and abroad to the same extent as they offered goods and services for sale, prices must fall and industrial depression would follow. He added that New Zealand must continue to aim at providing sufficient funds in London to meet her commitments, but it was not desirable to accumulate unnecessarily large sums which could be better useci on purchasing British goods and services.

Social Security Would anyone say, asked Mr Savage, that an expenditure of £17,750,000 on the social security proposals, mainly among those who would spend it as soon as it was received, would not benefit New Zealand trade, internal and external? He held that the bulk of the money would be immediately spent with the small shopkeeper and others with goods and services for sale. He criticised the National Government's policy and compared its record with that of the present Government which, among other things, had given a guaranteed price for farmers, set up the national marketing of primary products, reduced farmers’ mortgages, given a minimum wage for agricultural workers, restored wage cuts, instituted pensions for deserted wives, increased and restored war pensions, re-established the Arbitration Court, etc.

Continuing, Mr Savage said he had said a hundred times that there was no chance this side of the grave for an average person to save sufficient to keep body and soul together for invalidity or old age, and it was this condition of affairs which necessitated the introduction of the National

Health and Superannuation System. Mr Savage, in conclusion, briefly referred to the remarks made about him by Mr W. W. Mulholland, Dominion President of the Farmers’ Union, and stated among other misrepresentations Mr Mulholland and others insisted upon saying that the Government was determined to socialise farms. Nothing could be further from the truth. The average farmer had a greater equity in his farm to-day than he had three years ago. "That is my reply,” added Mr Savage. "Our job is to keep on increasing that equity until the farmer is free.”

"Nothing Constructive" Mr H. Atmore (Ind. Nelson), said the last Government had never learned to think of things in terms of human beings. It had thought of things in terms of balanced Budgets. Opposition members in the debate had made no attempt to show what measures would be repealed if they came into power. Nothing constructive had been offered. Mr Atmore went on to criticise single men’s camps when the National Government was in power and stated that

there was not a prisoner in the gaols who was not receiving better treatment than the young men in camps, yet the Opposition to-day were issuing a call to youth. Not one member of the Opposition had evinced dissatisfaction with the existing system under which people lived in New Zealand. Slumps said Mr Atmore, were made by the last Government by taking away the purchasing power of the people. The Rev. A. H. Nordmeyer (Labour, Oamaru), said that if Mr Coates in his speech last night had created an impression that the Government did not know its own mind in regard to the superannuation scheme, it was a totally false impression. A scheme of such magnitude must of necessity take a long time to draft. The member for Pahiatua had said that only the indigent, the unfortunate and thriftless would participate in the scheme. "I suggest,” said Mr Nordmeyer, “that that is an insult to thousands of men in this country, who through no fault of their own, had been unable to aggregate some wealth.” Reason for Attacks on Press Mr R. A. Wright (Ind. Wellington Subs.), said that the Industrial Efficiency Act was a danger to the business community, because it gave the Minister tremendous powers, enabling him to call upon people in any industry to obtain a license. It had been said that those opposed to the Government had been trying to create a fear complex in the minds of the people. He believed there was a fear complex largely due

to statements made by members of the Government. Referring to the Government’s attacks on the press of the Dominion. Mr Wright said he believed the objective of such attacks was to justify the Government’s attitude in having all its publicity broadcast. Mr A. G. Hultquist (National, Bay of Plenty) referred to the Government’s Public Works policy and thanked it for

the work done in his electorate. He also pointed out the necessity for further reading work in that area. Amendment Defeated On the conclusion of Mr Hultquist’s speech, the Opposition's amendment to the Address-in-Reply was put to the House and was defeated on purely Party lines by 41 votes to 19. The mover of the address, Dr. McMillan (Labour, Dunedin West), in reply to the points raised during the debate, defended the Government’s housing policy and contended that there had been a swing towards Labour during the last year or two. The debate concluded at 10.20, when the motion to present a loyal address to His Excellency the Governor-Gene-ral was carried without a division. Fifty Government speakers, 16 Opposition and five Independents took part in the debate, which occupied eight sitting days. Mr Savage intimated that to-morrow afternoon would be devoted to the discussion of the report of the Committee on Maternity Services. The House rose at 10.25 p.m.