REPORT OF MONETARY COMMITTEE

Dominion, Volume 28, Issue 95, 16 January 1935, Page 11

REPORT OF MONETARY COMMITTEE

A Professor’s Views DOUGLAS CREDIT CLEARLY REFUTED The “Economic Record’’ of December, 1934, contains a review of the report of the Monetary Committee set up by the Now Zealand Government, the reviewer beiug Dr. Fisher, Professor of Economies at the University of Otago. Commenting on the review, Mr. J. A. Nash, M.P., chairman of the Monetary Committee, said yesterday that Dr. Fisher’s article was for highly academic consumption and should be judged in that light. Dr. Fisher had discussed points where he took up a view different from that of the committee. He had perhaps failed to take fully into consideration that the Monetary Committee had uot given its views from a highly theoretical standpoint, but had written for the average inquirer. A valuable part of the review was the discussion of deposits. “It is a fundamental fact that at bottom bank deposits are savings. . . Dr. Fisher further said : “Attention has been directed here almost exclusively to points where the reviewer disagrees with the committee. It should not, however, be supposed that these criticisms have anything in common with the superficial observations which the report drew from some sections of the New Zealand Press, where apparently little trouble had been taken to read or understand the document under review. The report contains much valuable work, some of its recoinmendations have apparently already been accepted, and it deserves to be widely read in New Zealand. Clear and Conclusive. “Few people will be surprised that the committee found it impossible to accept the naive claim of the spokesman of the Associated Banks that a conflict between the interests of bank shareholders and the interests of the community as a whole was inconceivable. (Minutes of evidence, pp. 51-2). Nevertheless, the majority report, signed by six Government supporters, is, on the whole, not unfavourable to the existing banking organisation. After adequate reasoned analysis, numerous ’unorthodox' monetary schemes were rejected. including proposals by Major Doughs, and by the New Zealand Douglas Social Credit Movement. The committee’s refutation of the Dougins creditors and the Guernsey Islanders is clear and conclusive. Minority Report Disappointing. “The minority report will be disappointing to anyone who had hoped to see emerging from the New Zealand Labour Party ideas for reconstruction on a genuinely socialist basis. The minority report cannot, of course, be assumed to express the official view of the Labour Party; the evidence of another Labour M.P., Mr. IV. Nash, showed that there is in the party some appreciation of the wider implications of socialist policy. “Mr. Downie Stewart, a former Minister of Finance, was apparently unwilling to associate himself with any document which refused to affirm that ‘whatever is, is best.’ He refrained from signing the report, partly because ho was afraid that the committee was in favour of a ‘rigidly-controlled economy.’ No such implication is suggested by a careful reading of the report ; there are many references to controlled or planned economy, but a demonstration that certain alleged monetary reforms would be ineffective without a large measure of control does not necessarily carry with it approval of either the reforms or the control.”