MONETARY REFORM

Wanganui Chronicle, Volume 79, Issue 277, 25 November 1935, Page 9

MONETARY REFORM

MR. N. R. BAIN’S CRITICISM PEOPLE’S SAVINGS IN DANGER. APPEAL FOR CLEAR THOUGHT. Addressing a large audience at St. John’s Club Hall on Wednesday night last, Air. N. R. Bain trenchantly criticised the principles of the monetary reform advocated by the Labour Party and also sponsored by the Douglas Social Credit enthusiasts. “lu regard to the Labour Party’s policy, said Air. Bain, it is simply this —the whole of its policy rests upon the creation of credit. Their policy rests on the fact that it is their intention to assume control of public credit. Everybody knows that is a iccognised principle that you do not get anything-for nothing. I. have always found, and you too will have found that you have got to pay for what you get. “1 have shown to you that the Democrat policy is based on borrowing, but when we come to the Labour Party and begin to examine it, it is well for us to see what they say themselves. Some of their supporters have i told us that it (Toes not mean borrowing. others have assured us that they would not think of inflicting any further taxes upon the people. That being so, any sane and intelligent person ‘can only come to cne conclusion as to the source from which this money is to come. That is, it is their intention to create money. They describe it as “costless credit.” Now, as I have already said, my experience of life is that you cannot get anything without paying and as for so-called costless credit you will have to pay for it sooner or later and pay dearly too. I myself am quite willing to believe and am open to persuasion, if you can prove to me that it is possible to create credit i which has for its basis anything but 1 real wealth. World-wide, the people of I every condition of life are suffering through the lack of purchasing power. This is not singular to New Zealand. All countries of the world are affected. “One would have thought that if I there had been a successful country where such monetary reform proposals as are advocated by the Labour Party had been a success, that the Labour Partv would have come to light and said,’‘See here, this is what this country has done.’ On the other hand, I am quite sure that our New Zealand Government in the interests of the people would have seized the opportunity of exploiting it for the benefit of the people. What do you find? You find that the Labour Party is unable to bring to your notice any country in the world where monetary reform along thelines suggested by them has been a success. 1 say that they have not brought forward one single illustration, and moreover they cannot do so. That, I am sure, will be admitted by them if they are honest. Taking Over the Banks. ‘ ’When you come inside the walls of your own home you do not embark upon every wild scheme that presents itself. You do not embrace a thing unless you are sure that it is sound and 1 say that when this proposal of the Labour Party, which is so involved that none of them can give a clear outline of how it will be put into operation, you are, I am sure, as sensible men and women, going to ask the question, ‘What does this involve?’ Air. Savage has told us that it involves taking over the two banks of our country and no doubt he refers to the Reserve Bank and the Bank of New Zealand, both of which the people of New Zealand have invested their capital. He does not tell you how an involved transaction of this natureis going to take place. Oh no, they are just going to be taken over. Many of you know, transaction of this nature is going to tell you, and I am going to prove it also, for my training serves me in good stead in that I do not make any statement of fact unless 1 am in a position to prove it to the hilt. When a labour candidate is elected, his policy is determined and controlled by the vote of the Trade Unions Conference. You may elect into this country a Labour member and a Labour Government pledged to give you guaranteed prices and costless credit, that is, of course, if they get into power, which they won’t. (Applause). “Then the Trade Union meets and drops the proposal, the decision of the union is final. You know, and you have got to know, when you are voting for Laoour, that you are attempting to elect a Government which, is to be dictated to as to its policy by a section of the community outside of Parliament. 1 am not saying this merely for the sake of saying it. As 1 have said befor i do not make statements of this nature unless 1 can prove them, i have the rules of the Trades Union nonference with me and 1 tell you that the j vote and decision of the Trades Union I conference is final. 1 ask you to»accept niy word for that and if any of , you doubt it, I am prepared to prove it to the hilt.” Air. Bain then quoted the case of Air. Sullivan, Mayor of Christchurch. “An excellent chap and a man who has done good work,’’ said Air. Bain. For many years it was the policy of the Labour Party to the Christchurch City Council to support proportional representation. When the Trades Union conference met, they decided that proportional representation was lo be dropped, and against his own wishes, after having strenuously attempted to obtain freedom of action for himself, and his councillors, Air. Sullivan, on putting the motion, had to say he did not regard it as a matter of conscience, for,” said Air. Bain, “if he had not voted on the motion in terms of the dictates of the Trade Union conference, he and any other councillors who voted against *lhc motion would have ceased to be members of the Labour Party. The True Meaning of Credit. “To mobilise credit and attempt to assume control and establish costless credit —Air. Savage, when asked what this meant, said it was colossal cheek and confounded impudence to ask for the details, which he said could be worked out by any man or body of men. When you attempt to mobilise credit, I ask you what is the credit of the country, and I say it is the sum total of the credit of the people. If you go to a bank or trading firm for accommodation, there are multiplicities of matters that the bank or firm will take into consideration. First of all. your reputation, the way in which you conduct your business dealings, the circle in which you move, and your reputation for carrying out your obligations, and the success you meet with, in your application will depend almost wholly upon the confidence the bank has in you. The whole structure of credit is based on confidence —that is the confidence that the people have one in another, the confidence the people

have in the Government, the confidence the workers have in their employers and vice- versa, the confidence that the workers have in their employers and and vice versa, the confidence that the people have in the banks, merchants and other financial institutions *which have been built up in this country during a period of 80 to 90 years. 1 want ; to impress . upon you that national credit does not consist of a few bales of wool or sacks of potatoes that you can store away in a shed. It is a ’ psychological matter and also it is very ; timid, a breath of rumour may cause j it to vanish in a night. If you swallow this bait of costless credit, never ■ yet tried, and you allow the Labour ■ Party to attempt to bring it about, | both you and the Labour, Party wake up to find that some morning your | credit has flown over night and the | promises made by the- Labour Party flown with it. If the Labour Party could get into power and attempt to carry' out this costless credit scheme what about your £50,000,000 now invested in the {Savings Bank? If you were able to uplift it where would you find an investment? I don’t suppose under costless credit they would give you any interest. I have told you there is no country in the world that has tampered with its credit without disaster. On other platforms I have mentioned the case of Germany, and how, even while the housewife was purchasing her supplies, the price of goods would rise thousands of marks while she was in the shop. France experienced similar trouble when she devalued h§r franc. You have also to remember the experience of England under Labour rule. Britain had had an experience in regal'd, to her currency when she inflated it by the issue of the John Bradbury. When Lord. Bnowden left office England was faced with a deficit of £790,000,000, unemployment was rife, the spectre of ruin and disaster loomed on the horizon, many of the nations of the world said: ‘Good old Britain is down and out? The Labour Party had to give up the reins of Government and the National Party then took over the administration of the affairs and staged the finest recovery that the world has ever seen. (Applause.) Britain’s National Government “Britain is in the position of not CL-Jy being the world’s ’ leader in finance, but the leader in international politics. Who has been responsible for maintaining the League of Nations and the peace of the world * Gr-.-at Britain under a National crovcr.iment is the admiration of the waoie world. (Applause.) “Just iccently in England th® National Government has subnitted lie result of its stewardship ami what is the resd.t The National Gjverriincnt has been returned with an enormous majority and with an almost coli.r.j’etc rejection of the Independents who are not wanted. (Applause.) “We are a young country, we have followed Britain's lead. Without fear of contradiction I say the results have been successful and I say it would be the heiglith of folly for this country to adventure on any such senseless experiments with costless credit or even Douglas Credit.” Air. Bain then quoted extracts from opinions of Labour leaders of the Old Country, including Lord Snowden, who in no uncertain terms had denounced many of the proposals put forward by the Labour Party and stated that they were fare to young 4o be entrusted with a Government of a socialistic country. Continuing, Mr. Bain said: ‘T am afraid that many of the Labour leaders and Labour people do not take time to read what is going on in other parts of the world. A voice: We have no time to read while we are looking for work. “People oft-times say to me: ‘Don’t you think, the Government has made a few mistakes?’ No doubt it has, but lit must be remembered that it has passed through unprecedented experi- ' cnees and it is easy for those who have done nothing to criticise a fair and honest attempt to meet the situation. If you are, in view of these public and definite statements made by tho leaders of the Labour Party, going to embark upon ‘wild-cat schemes,’ such as are being put forward, you are riding for a fall and joining in a very dangerous policy. The Labour Party and also Air. Veitch criticise the Government for the number of boards. .1 say these are more necessary at the present time owing to the difficult and unprecedented questions that have arisen for consideration. The test you can apply is this—lmagine for a moment Mr. Cotterill in Cabinet being called upon to express an opinion on banking matters and all the consequences thereto, such as the taking over of the Reserve Bank and the Bank of New Zealand as suggested by Mr. Savage. Do you think. Air. Cotterill ’s training and knowledge is sufficient to give him an appreciation of the true facts so that he could make a sane and sound decision? I say, unquestionably it is not. If you come to that conclusion, and I am sure you will, then that is a reasonable answer to the question. Democrats to be Disregarded “Tho Democrat Party is my mind not a serious factor and can be disregarded and the Labour Party can be discharged on its own admission that it is not yet fit to govern. I ask you, therefore, as sensible men and women, is there any alternative but to return the National Government power?”