BANKING AND THE PRESS

Press, Volume LXXI, Issue 21414, 5 March 1935, Page 8

BANKING AND THE PRESS

TO THE EDITOR OP THE PRESS. Sir,—Mr A. V. Winchester, the reTiring manager of the Bank of Australia, dilated at length upon the indiscretion of the newspapers in permitting the circulation of -'ill-con-ceived and pernicious criticism" in connexion with what he terms "Our economic troubles/' He continued: -If these perorations are allowed m the paper, it is a pity that some means are not taken, perhaps the addition ot footnotes, to prevent people from being led astray/' . This bitter dissertation terminates with the amusing assertion that "banks have neither the' time nor the inclination to do this." Precisely, no! During the last years, which have seen the lot of the people progressively "ctting worse in spite of the parrot cries of "return of confidence," ■•round the corner," "more optimistic outlook." "overseas and foreign markets" and other tragically humorous platitudes, the financial institutions have brought very little effective artillery to work to justify their presence or prolong their existence. Theirs must be a policy of "en camera" and "sub rosa." This spirit permeates their operation of creating costless credit and handing it out in the nature of an interest-bearing debt to the community, who are, perhaps, to some extent mercifully spared from seeing the joke, unless, of course, some unscrupulous papers "permit the circulation of ill-conceived and pernicious criticism" on their activities. This attitude is most obvious, so far as hidden reserves are concerned. The banker's injunction to yress men to "muzzle" any criticism of banking technique, their self-expressed desire for a journalistic dictatorship, is quite in (une with the cardinal factor of financial institutions. The assertion that "The welfare of the banks depends on the welfare of (he community" is partially correct. As an analogy, a dairyman could not expect any milk without having the cows. A debt-ridden community suffering from financial anaemia, must of necessity and convention, seek some specious form of financial artificial respiration, although it incurs more indissoluble debt. It has not yet developed a social philosophy which would determine that these lending houses are iniquitous and unnecessary. The chaotic ramifications of the debt system progressively working towards a final crisis of its inability to function will definitely point the way to those who may still have faith in a shattered idol.—Yours, etc., J. H. ROBINSON. Mount Hutl, March 1, 1935.

TO THE EPITOK OV THE PKESS. Sir,—Your editorial on banks and the public, in Saturday's issue of "The Press," began by sympathising with the bankers as the subjects of uninformed and ungenerous criticism, proceeded to attack Major Douglas for taking refuge in cloudy abstraction (a new interpretation of uninformed and ungenerous criticism), and finished up bv admonishing the banks for being unable to justify their actions to the community: "When the chairman of an important bank makes crude mistakes of fact and logic '.n his annual address to shareholders, public confidence in the banks is not strengthened." Exactly! There is no need for an editor to tag these utterances as Mr Winchester suggests. The public is learning to discern the truth for itself. What interests me particularly in your remarks is the suggestion that the banks are in danger of coming under political control, by which I presume you mean that politicians \v\M administer the banking system. \ou are in effect raising opposition to a proposal to nationalise the banking system. At present the Labour policy on this point is somewhat nebulous; but it may reconcile you to Major Douglas to know that he is emphatic that the nationalising of the banking system would be a change in administration without a change in policy, and would therefore make the task of changing the policy more difficult. To bring about a social credit state it is not necessary to interfere with the administration of the banks. All that is necessary is to lay down the policy that the banks shall follow, instead of accepting the policy that they dictate, in other words credit i.e., money, shall be created by the state on its own terms and not by the banks on their They will continue as custodians and book-keepers and there will be no object in nationalising them. Your disparaging reference to Major Douglas is the first occasion on which a reputable paper has attacked him. since he was here. Hitherto the only attack came from a paper noted for its muck-raking proclivities, and such could be ignored. However, you remarks are in keeping with the high standard of New Zealand journalism and can be accepted as a fair expression of opinion current to-day in circles that have been more than rattled by the course the depression has taken. They cling fatalistically to old ideas; but the relentless march of events is proving day by day that the financial system which has brought about the age of plenty by imposing the Pauline doctrine of work-before-you-eat can no longer impose that doctrine in the face of abundance. Work to-day with the aid of machinery means increasing the abundance without the means of distribution. We who are face to face with the approaching crisis are not all competent to pass an opinion whether Major Douglas's visit to New Zealand was disastrous to the social credit movement in New Zealand. At present it is not social credit that is meeting disaster. It is the refusal of those in charge of the wornout system to face the facts that is bringing disaster, not only to New Zealand but to civilisation. I suggest

that we leave it to history to decide the value of Major Douglas's visit to New Zealand Meanwhile we are all making history whether we like it or not.—Yours, etc., W. B. BRAY. March 4, 1935.

TO THJi EDITOR Of THE MISS. Sir,—ln your leading article of March 2 you state, inter alia, that it must shake Mr Winchester's faith in human nature to find so many of his fellow citizens firmly convinced that some fantastic method of issuing credit is a cure for all economic ills. From what follows, it is obvious that you were referring to the Douglas Social Credit proposals; but why you chose the word "fantastic" to describe such a highly scientific system is anything but. obvious.

Is it "fantastic" to advocate that the control of community-created credit should be administered in the interests of the community, to whom it undoubtedly belongs? Docs "fantastic" apply to a system that has for its object the regulation of the volume of money so as to ensure that whilst producers shall at all times get a reasonable profit on their goods, the price to consumers will be reduced by the application of the just price discount? Can the word possibly apply to a system that will maintain an equation between consumption and production, and thereby banish for ever the bogies of inflation and deflation, together with the unnecessary sufferings of millions of povertystriken creatures throughout the civilised world? If you had described the present haphazard financial system as fantastic you would have been on surer ground. What, for instance, could be more fantastic than the gold standard,

under which the amount of credit available is based, not on the total value of the goods to be exchanged, but on the value of a rare metal that cannot be increased as desired? Again, what could be more fantastic or idiotic, than the system that allows a few multi-millionaires (with no obligations to consider any interests other than their own) to increase or decrease at their own sweet will the amount of money available? Finally, how can anvone justify a system that after five years of poverty amidst plenty is still unable to suggest a method whereby -the plenty can be distributed, but advocates, instead, the destruction of food while millions have not enough to eat. You are badly informed when you state that the result of Major Douglas's appearance before the Monetary Committee was disastrous to his moveemnt. On the contrary, the movement is making phenomenal progress in New Zealand, as well as in many other countries, and has excellent prospects of being put into operation in one or more countries in the near future. You are most unfair to the Major when you state that he took refuge in cloudy abstractions instead of giving his views a practical application. A study of the minutes of the evidence given before the Monetary CommiUce will show that there was nothing cloudy in his suggestions, and that he had two excellent reasons

for not submitting a scheme for New Zealand. In the first place he had not sufiicient time to collect the necessary data, and second, as the committee was'not prepared to admit that the present system had failed, it would obviously have been a waste of time to propound an alternative scheme. He therefore confined himself to suggesting that the money available under the present system could be augmented by monetising secret reserves. —Yours, etc., G. W. ATMORE. March 4, 1935. TO THE EDITOR OV TUB TRESS. Sir.--In Saturday's leading article you say that Douglas social credit will go the way of technocracy, yo-yo, and the New Zealand Legion. On the other hand, if, has maintained a steady growth since 19:20. However, if Douglas social credit is fallacious, it certainly will go the way of yo-yo and the rest, despite its steady progress to dale. For rav part, I am no respecter of dogmas, and if Douglasism can be shown to be fallacious, the sooner it goes the better. It. is quite true that Douglas flatly refused to explain his proposals to the Monetary Committee. Douglas took up the attitude that it was useless to explain a monetary system to a commit Lee, the majority ot whom were quite satisfied with the one in existence and determined to. defend it. When Mr A. R. Allardyce, then general secretary of the movement, interviewed Mr Coatcs about the order of reference, Mr Coales replied sharply that the present monetary system would remain so long as he was in charge. Mr Allardyce naturally replied that in that case the committees decision had already been reached, and that proved to be the case, the best possible proof of this being Mr Downie Stewart's report. All New Zealanders have a certain regard for Mr Downie Stewart; he has what we call a "mana." . Mr Stewart's "mana" is due to his record in calm reasoning. Ido not mean to imply that Mr Stewart is particularly clever, but that he has a strong measure of intellectual honesty that prevents him .from making absurd and illogical statements in support of a case he wishes to advance. Of all the men who sat on the committee, Mr Stewart could have had the strongest personal reasons for wishing to discredit Major Douglas. After reading Mr Stewart's report, one can only conclude that, whatever he may have Ihought of Douglas, he was nauseated by the crude attempts of the majority to come to certain conclusions. I have never read a more scathing report than that written by Mr Stewart. He accuses the majority of contradicting themselves blatantly. The report was a Gilbertian hotch-potch and was universally condemned; and the reason is to be found, not so much in the paucity of intellect as in the desperate Hgiit the majority were compelled to wage against truth, in order to come to their pre-arranged decision. And therein lies the crux of the whole matter. So far as I know, I was the first person in Christchurch to give a public lecture on Douglas social credit. It may be supposed, therefore, that I am steeped in Douglas ritual, A and B, Just Price, and the inevitable "patter" that accompanies every new philosophy and new religion. On the contrary, I do not care two hoots for these things. To me it is a fight for the truth, and for all practical purposes the fight begins and ends there. As you yourself have stated, definite and direct questions have been asked by our opponents. We are met by complete silence or feeble attempts at ridicule.

If Douglas social credit is fallacious, then let the Government ignore it and get on with the job of putting the country right by methods more acceptable to them; but put it right and stop talking nonsense about turning corners. One feels that it is almost necessary to apologise before using the phrase "poverty amidst plenty"; but it does express ihe state of our country and denote the job of work that lies ahead. The Coalition Government has nine months to go; and there are one or two things it must uo in that time if it wishes to retain the respect, let alone the support, of decent people. It must remove the reproach that New iZealanders are failing to support their own womenfolk in a state that allows them to bear children without the fear and consequences of malnutrition. It must make a start with the industrial development of New Zealand regardless of what outside countries may do or say. It must in some way regulate the money incomes of New Zealanders on a basis that is completely divorced from overseas prices and overseas control. It must give up its poisonous nonsense about supplementing New Zealander's incomes through tourist business.— Yours, etc., D. C. DAVIE. Sumner, March 4, 1935.