STATE TRADING

Waipa Post, Volume 45, Issue 3212, 4 August 1932, Page 5

STATE TRADING

MENACE TO COMMERCE. WARNING NOTE SOUNDED. Apathy on the part of business men and the community genera.ly to political matters, and the danger to State interference in private traae and business, with part-cular reference to New Zealand, were commented upon by Mr Harold Johnston, K.C., in an address on "National Efficiency and State Trading," delivered to members of the Wellington Reform Club last Monday evening. The State, he said, was not in character in any way fitted to enter into business. At the conclusion of the meeting, wh.ch was very largely attended, a resolution was earned unanimously pledging the club to fight against the increasing amount of interference and to make it a ,ive issue in the Reform Party's platform. In his opening remarks Mr Johnston said that the real po.nt at issue to-day was that there was one party in New Zealand c'ons:antly advocating State monopoly of every trade and business in the country. By adopting for many years a " laissez faire " attitude, supporters of the Reform aPrty had almost lost the power of putting up proper arguments against that pol.cy, although the majority of its members had great hostility to State interference and to State trading. TRADER AND SOVEREIGN. Mr Johnston quoted from Adam Smith, founder of the school of English economists, who said that no two characters seemed more inconsistent than those of trader and sovereign. The speculative nature of commerce, the need for constant watchfulness, and minute calculation of the chances of ga n or loss which, were ics essential features made it impossible for a State to hope for revenue by engaging in it. The inexorable fact was that a Government should not go into business at all. It could no more carry on business than a gorilla could mend watches, as no less authority than Mr Casson had said. New Zealand had reached a stage where a serious accounting had to Be taken. At any rate, if it were not taken now it never would be taken at all. We had before us the recent example of Australia, and the results of a stupid policy, which all could see must lead to ruin, were very apparent.

POLITICAL EDUCATION NEEDED.

Mr Johnston spoke of the great need for political education among the people of to-day. He particularly the apathy and ignorance shown to political matters in New Zealand. The question to-day in the Reform Party was: " Are we going to make opposition to State intervention a live issue in the policy of the Party or not ? In my opinion, unless we do so, we are absolutely doomed." The position was that bus'ness people were keeping out of politics; and not only keeping out of them, but refusing to support them, because of some stupid doctrine that they should not take part in party politics. When there was a question of such importance as they were considering that evening it was only through party politics and party organisation by which any progress could be made. That was why the meeting was asked to consider that the Labour Party's policy of State monopoly should not be a platform plank in the party to which the Reform Club gave ibe allegiance.

Mr Johnston dealt w'th several enterprises which had been conducted by the State in New Zealand, and showed how they expanded their operations both on parallel and vertical lines. He referred to the Public Trust Office, which expanded on parallel lines, in the same manner as a bank. Many of the banks in England had undertaken to do trustee and executor work in addition to their usual form of trading. "

The Public Trustee did exactly the same kind of thing. He to6iT"money on deposit, just as the banks did, and if the money was lost through lack of business management, or foresight, which the business of banking required, the State had to make the loss up. Also by taking its legai / from the hands of the solicitors, the State was undoubtedly losing a great deal in income tax. He did not consider that this could benefit anyone. CASE OF THE RAILWAYS.

As an illustration of the way in which a State enterprise could expand vertically, Mr Johnston quoted the railways, the coal for which was supplied from State mines. The electric power boards also interfered with private enterprise by selling electr'cal goods, and if there was a loss there was no means of seeing where it had arisen.

All these examples led one to one conclusion, Mr Johnston said, and that was that the State in character was not fitted to enter into business. If it did, that business was subject to political pressure on every hand. Just look at the railways, for example. A train stopped here and there, irrespective of whether it cost £lO or £IOO to do so. One could come to only one conclusion: that political pressure was being brought to bear. Moreover, State enterprises could not be subject to the same tests as private enterprises couM. It could not be seen whether they were sue; ceeding or not, although it could ge% erally be taken that they were not. They had to remember, in advocating that State Socialism was in the worst interests of the community, to realise that they were not ask : ng for a selfish policy which was not in the interests of the whole community, rich and poor alike. All through the ages employment had been provided by private enterprise. Why had private enterprise been unable to absorb all the labour offering at present ? Mr Johnston asked. "It has been unab'e to do 'so partly because of Government interference," he said. Certain clauses of the Arbitration Act which had recently been repealed, had interfered-.,greatly with industry and the extension of trade. Employment was going to be ab-'-sorbed by the efforts of private trades and business men, and the present problem could not be solved unless the private individual could pursue .his

business in the best way possible. " It is no good leaving the Labour Party to continue a policy of State Socialism without our controverting it," Mr Johnston said. "It is no use leaving it to a few, weeks before the election. lam somewhat surprised at the apathy .of. the business people in regard to: a policy that must affect their interests. We in Wellington have hardly any political representation at all, except one membervfrom the suburbs. I was born in Wellington, and am proud--of it; but I think it is an absolute disgrace that we cannot organise sufficiently well to get fair representation of a place like' this in Parliament. I think" there must be something wrong in the mental life of this community if it sits down at this state of affairs."