CURRENCY REFORM.

Waikato Times, Volume 115, Issue 19203, 13 March 1934, Page 7

CURRENCY REFORM.

EVIDENCE CONTINUED

CASE FOR THE BANKS. FURTHER CROSS-EXAMINATION. 11. Detailed cross-examination of Mr E. C. Fussell, one of t'he representatives of the ■ Associated Banks, was a feature of the sitting of the Monetary Committee in Wellington last week. The conclusion of the first day of Mr Fussell’s cross-jexamination was published yesterday. “Robbing the Robbers.” When the committee resumed the following morning, Captain Rushworth continued 'his cross-examina-tion, particularly in regard to the power of banks to "create” or “raise” credit. Captain Rushworth asked Mr Fussell if, in the event of a request for a judicial inquiry into the monetary system of New Zealand, with evidence to be taken on oath, would the associated banks co-operate in advancing such a request, but Mr Fussell said he preferred to supply a reply to the question in writing at a later date.

Captain Rushowrth: You have seen Major Douglas’s proposals? —Mr Fussell i Yes. You know that what he suggested was the monetising of the banks’ reserves, without confiscating anything from the banks. That was quite clearly demonstrated during his examination. —“No. I consider they would be confiscated. The associated banks have already given their reply to that.”

Captain Rushworth: I had the advantage of hearing part of Major Douglas’s evidence, and desire to be quite fatr to him when 1 say that his proposals did not Involve confiscation, but still It Is evident that the banks took a contrary view

Mr Downie Stewart: He told us he was going to rob the robbers Captain Rushworth: That was not in relation -to this particular proposal. Mr Fussell: Major Douglas quoted an old Spanish proverb which stated that “he who robbed the robbers gained 100 years’ remission."

Cause of Annoyance. Cap lain Rushworth: That possibly explains the rejoinder that Iho banks have submitted here to Douglas’s proposals exhibiting a considerable degree of annoyance apparently. I suppose that Is probably the cause of il —the suggestion of confiscation “Yes. I should say if they were annoyed, they were justified in being so.”

i suppose other people who had their assets confiscated would probably experience a similar kind of annoyance?—-“That is a matter on which I would not speak on their behalf.”

■ Do you know that wherever Major Douglas has been addressing meetings, Immediately afterward a very expensive advertisement has appeared in newspapers?—“l have seen that.”

Can you tell me of your own knowledge whether the banks are responsible for that?': —“I know nothing whatever where those things coma from, or how they are put In." You know that when this committee laid down Its procedure it was decided that anyone who had anything to advance In the way of monetary reform would have to proceed as plaintiff versus defendant? The chairman: I do not think that was laid down by the committee.

Captain Rushworth: No. Very well. Major Douglas, rightly or wrongly, apparently formed the opinion that this committee was prepared to consider the present monetary situation; that was regarded really as— The chairman: Excuse me, Captain Rushworth, I think that was cleared up in ihe correspondence. I think Major Douglas was told the present monetary system could come under discussion.

Captain Rushworth (to Mr Fussell): Eventually he appeared 'here and submitted certain proposals.? — “Yes.”

Do you know anything of his famous theory?—“l have read something or It." You know that, generally speaking, he propounded, some 14 years ago, a theory alleging certain defects in the monetary system?—“l understand that for a considerable number of years he was engaged on a theory which is known as the Douglas theory." "System,” or "Theory.” Not a system?—"lt is the suggestion of a system, I should say." You don’t know what the theory is?—“Do you want mo to give a definition?” No, I don’t. —“I have a general Idea." . There seems to be a desire to accuse Major Douglas of having invented a "system." I suggest It to you as a student that what lie has propounded is a theory?—"lt seems to me that that is ihc case, but lie may have outlined a suggested system, but I should not suggest that would be any condemnation of him having propounded the theory.” You know he had to leave the Dominion ?—'"Yes." Owing to nxed engagements.— "Yes.” Do you know that those engagements were with Governments and legislatures in the United Slates and Canada? —“No. I did not." \nd that one of the most pressing reasons was that lie had been urged to call upon President Roosevelt In Washington as soon as possible?— 1 note the. information." Do you know that British Rotary lias issued a pamphlet indicating that they are convinced of the truth of the Douglas theory?—"ls that so?” And that the Southampton Chamber of Commorco, and tho London Chamber of Commerce, also? I am moroly putting these Questions to you because 1 want to suggest to you that if that theory is right, and It seems to have been accepted by intelligent people In every civilised oountry —if it is right, It seems to me it Is of the utmost Importance—anything that suggests that Major Douglas Is either a lunate. or r. Kiiavo Is to bo deprecated. Do you agree with that? —••I agree that If Ids systom is right he Is entitled to oxpross his views. I should say In a British country ho would bo ontitled to oxpross Ills views, even If he woro wrong. Peisonally ! would not label a fellow-man os a knavo or a lunatic."

You would not suggest it in the case of '.Major Douglas?—“That is not a fair question I 'nave no reason to consider his hona tides an 1 Itis belief in his own system arc simulated " Charge for Admission. Have you seen suggestions in the Press that lie. charged for admission for 'his lectures?—“Yes, 1 have seen some reference to that.” Do you know that is quite untrue? —“No ! don't know Unit is untrue, t know that money was paid for admission. Whether lie got it was another mat ter.’’ The - chairman: Purely, Captain Hus'hworth, this does noL affect the committee? 1 think it is unfair to put these questions. Captain Hushworth: If you rule them out— The chairman: I must rule them out. 1 think it has gone far enough. Captain Rushwort'h: Very well, i accept your ruling. There is only one oilier question I have to ask: Now that. Hie Reserve Bank Is established, the function of creating, issuing and cancelling money is transferred from the associated hanks to tiie Reserve Rank? Mr Russell: The. function of issuing notes will he transferred from the trading hanks to the Reserve Rank in accordance with ordinary reserve hank practice. The manufacture and issue of notes is transferred from the assoc ialed hanks In the Reserve Rank? - "The inaiuil'aelure rtf notes is md a function uf the Reserve Rank. Nol"s arc issued, and are manul'aclured olscw here.” \R Riisiiw ortii. having concluded Ids cross-ova minal ion, congratulated Mr Ftissell on Hie dogged tig lit h” had put up and added that the hanks had no need to he ashamed of the:r rep resen tali vo