CURRENCY REFORM.

Waikato Times, Volume 112, Issue 18809, 3 December 1932, Page 10

CURRENCY REFORM.

GOVERNMENT INACTION. 1 j FARMERS’ UNION WANT INQUIRY. I - • . FUTURE OF DOMINION AT STAKE. For some months past the question of currency reform has been a very live topic of discussion at meetings of the Waikato sub-provincial executive of the New Zealand Farmers’ Union, and many speakers have advocated a reformation of the system as the solution to tho Dominion's major problems. The subject was again discussed at the monthly meeting of the executive yesterday, when, following consideration of a remit from the Matangi branch, a decision was made to press for an immediate inquiry into the system hy the Government. The Matangi remit was as follows: —“That owing to flic appalling economic conditions ami Imminent disaster to the nation caused principally hy the iniquitous policy of deflation forced upon the people, the Auckland executive shomd be urged to take immediate action to organise a mass demonstration of farmers in Wellington to protest to Parliament and urge an immediate and open inquiry into the whole question of currency reform with a view to evolving a scheme of anchored.inflation •sufficient to stabilise price levels and enable the nation to meet its external and internal obligations and to save thousands of people from the misery of starvation and want in this land •and age of plenty.” ... Should Be More Aggressive. Speaking to the remit, Mr W. Boyd (Matangi), said that all would agree that the lime had arrived for a definite stand to be taken. There was still time to save the country if action was taken. He thought that the farmers should be more aggressive, yet keeping within the law. “The failure of the Government to institute an open inquiry into the many obvious defects Jn the present monetary system is causing a great deal of alarm In the minds of those who believe that the only possible solution lies in the complete reformation of this currency system,” he said. “It Is difficult to understand the laok of interest by members of the Government in currency matters. Recently a bill sponsored by a private member, dealing with currency reform, was brought before Parliament but no criticism by members was forthcoming, and the bill met with the usual fate. With the revival of the exchange question there is brought very vividly before the public mind the pressing need for immediate action if the tottering economic structure is- to be saved from complete and total collapse. There Is fairly unanimous opinion on one point, and that is that unless the wholesale price level of primary produce can be maintained on a stable basis we are faced with the alternative of national and Individual Insolvency. Can this disaster be averted by a high pegged exchange or by a .straight out subsidy or terms to farmers'."- I do not think so. Palliatives or expedients will not effect a cure. This is no time for hot-headedness or precipitate action, but hard thinking and plain speaking is necessary. What has happened was predicted long ago by the-leaders of the Farmers’ Union, but the warning then uttered fell on barren ground. The position to-day Is intolerable. With the tremendous and ever-increasing disparity between wholesale prices on one hand and farm production costs, professional and other charges, we have reached a stage when we cannot go one step further forward. Policy of Deflation Responsible. “The policy of deflation which has been forced upon us has been largely responsible for what has happened. Some people heap abuse upon the banks, but why blame them? The banks have followed the traditional path of banking practice, inelastic and unchangeable. To-day we have a Government in power which has assumed the powers of a dictatorship, but the Government has so mortgaged •the assets of the Dominion to the banks that it is in exactly the same position as a farmer who would often' like to consign his mortgagee to the infernal regions, but dare not do it. The banks are in complete control and the Government subservient. The responsibility rests with the Government to right the position. It must be master' In its own house and the banks the servant of the nation. There is a growing body of opinion that the only possible way to right the position is by raising the wholesale price level and tiiat must be done by semi-arli-flclal means. A high pegged exchange lias been suggested, hut while that lias some merit it would also lie a very grave danger in many ways. Under no circumstances should bounties lie considered, as Unit would indicate that farming must depend on charily. There is left .tlie one and only untried remedy, a complete overhaul of the currency machine. Repealed requests have been made to Ihe Government for an open inquiry into Ihe whole method of currency and credit, but.so far nothing lias been done. Is ihe Government afraid of a showdown? If il is not. then one would expect it would he only lon willing to facilitate such an inquiry. Monetary Revolution. “We must have some form of anchored inflation sufficient to enable us to-pay for our external and internal obligations and so forth. This would, of course, moan a revolution in tho present monetary system, as the whole business would be taken over and adminislercd by the Government for Ihe good of ihe nation. Monetary revolnlion would he bloodless. and on that account, preferable to Ihe other variety, which must surely follow if nothing is done. While other countries are pulling their house in order we are doing nothing. This will give our competitors a tremendous advantage. We must not lie militant. New Zealand is burning while our politicians are Addling, and posterity will condemn them for their inaction.'' The reason lie had drafted the resolution was to urge the Auckland ovomitive lo lake sleps in Ihe matter, which must be regarded as a mailer of necessity in view of the proposal of Parliament lo adjourn. \ mass demonstration of farmers should be hold in Wellington to show the Government that [lie farmers were not gning to submit .to Hie present conditions. if a demonstration was i.unraclicahlo a deputation of not less than in or bn should be sent. Mr .1. 11. Kumiss, Pie president. (Continued in next column.)

outlined Captain H. M. Rushworth’? scheme for the stabilisation of primary industries. If price levels for the primary producers in New Zealand could be stabilised unemployment would bo overcome, and all classes' would benefit, while exports would increase enormously under the stimulus of a sufficiency of the medium of exchange. Mr W. Cummings (Taupiri), advanced the opinion that the State Advances Department should be transformed into an agricultural bank. Stabilisation Scheme Needed. ' Mr A. O. Haycock (Horsham Downs) said he had studied Captain Rushworth’s plan, and he did not think it was feasible, lie realised tiiat New Zealand could not carry on as aL present, and some scheme to stabilise Hie country was needed. Mr Boyd contended that an inquiry should he held, lo he open and comprehensive in its discussion. The farmers should go to Wellington and demand an inquiry into the currency system. The object of the remit was to request Hie Government to do Ibis. “Banking Is a gigantic confidence trick,” said Mr Furniss, in referring to tiie currency question. “If you go to Wellington you are doomed to failure. You arc leaning on broken reeds in Hie Coalition. I am in favour of a deputation, but while you have a Government tiiat says the mailer is in die hands of the hanks and Hie Prime Minister says lie knows nothing about currency, you can do very little." 'Dio Government has said that (his mailer is in Hie hands of Ihe hanks, and i! is (hereby shirking its responsibility.” said Mr Boyd. “The Government must he made to accept Hie responsibility." / 'The remit was carried unanimously, and il was deeided to forward copies In branches with I lie request Hint meetings should he held, and suggestions on Hie subject forwarded !o ’he Auckland provincial office and to Hie various members of Parliament. The meeling also decided In recommend 11 1 a I the provincial executives throughout New Zealand should he approached with a view to con "Tied action. The opinion that public opinion would pn slmitdalod if mass meetings were held was expressed by Mr F. L. ihiion Te K'owhai'i. who consider"! Iliat public feeling must lie arous'd if Hi" crusade of currency reform was til lie success fu I. In Ihe face of public opinion politicians would be brought to realise (heir responsibilities.