Evening Post. WEDNESDAY, OCTOBER 5, 1938. THE PLANS ALL READY

Evening Post, Volume CXXVI, Issue 83, 5 October 1938, Page 12

Evening Post. WEDNESDAY, OCTOBER 5, 1938. THE PLANS ALL READY

The political foundations laid for the edifice of Socialism in the first three years of the Labour Government's existence are worth "examining, because they represent the real beginning of an attempt to engineer a a new order in New Zealand, if the electors on October 15 give the engineers a mandate to proceed with the job. As in the case of any other building, the foundations tell the greater part of the story. The central pillar is the amendment of the Reserve Bank of New Zealand Act, whereby the Government, among other things, secured power to suspend a duty cast on the Reserve Bank by the Forbes-Coates Government's Act—the duty of giving, in exchange for Reserve Bank notes, "sterling for immediate delivery in London." By this amendment the Government can refuse to sell sterling^ to a private buyer, and to that extent (as far as overseas funds are in the hands of the Reserve Bank) can determine what moneys shall go out of New Zealand and what commodities shall come in. In the same amending Act it is laid down that the Reserve Bank shall "give effect as far as may be to the monetary policy of the Government," and for this purpose "the JBank shall regulate and control credit and currency in New Zealand, the transfer of moneys to or from New Zealand, and the disposal of moneys that are derived from the sale of any New Zealand products and for the time being are held overseas." That is one of the main piles on which the house of Socialism will rest.

Besides this enabling power for State Socialism there is a disabling section which may be aimed at the private trading banks. Section 23 of the Labour Government's amending Act, 1,936, amends Section 45 of the| original Act, 1933, by providing that, the balances to be maintained by the trading banks in the Reserve Bankj may be varied upwards, "by thej Governor of the [Reserve] Bank,! acting with the authority of the Minister of Finance." The trading banks can be disciplined by raising the balances they are required to maintain in the Reserve Bank; and this is a step towards what Mr. Lee prescribes as inevitable Labour j policy-—taking over by the Govern- i ment of all the banks. The founda- j tion Is therefore already provided forj monopolistic banking control, and the Socialist prophet thereof is Mr. Lee, who also happens to be Parliamentary Under-Secretary to the Ministry "of Finance. In the same year, 1936, the Government passed two other Socialisation Acts, one directed at primary industry, the other at secondary industry. In the first case, Government ownership of the product of farm lands was asserted, and the Prime Minister thereafter was able to tell the farmers that the Government did not want to own their land; Socialistic ownership of the product had indeed rendered Socialistic ownership of the land entirely unnecessary. The preamble of this Primary Products Marketing Act, 1936, declares that the Government shall acquire the ownership of farm products for export and may acquire the ownership of farm products for internal consumption. At, of course, the Government's prices.

Because the Primary Products Marketing Act was applied in the first place only to dairy produce, it is not to be assumed that this pillar in- the foundation of Socialism was of narrow width, and possessed of only a cow and calf outlook. Quite the contrary. The preamble makes it , clear tjiat a start is made with dairy produce because "it is not feasible to put into operation forthwith any plan or plans to deal effectively with all classes of primary pro- ; ducts." The italics are ours. Tech- ; nically, it may be true that an extension of the ownership and marketing machinery to other exported jfarm products (wool, meat, etc.) I may require special Acts, but the preamble is quite explicit in pre* scribing Government ownership, at I the Government's price, of "all ! classes of primary products" when feasible. The preamble proclaims Socialism in its primary industry aspect, and the intention is plain and does not need to be amplified by any interpretative book like that of Mr, Lee, The farmers have seen State ownership of their products written iint© the statutes, but manufacturers have not yet done so, They | are not, however, very far behind. It is true that the Industrial Efficiency Act, 1936, contains no promise to buy the manufacturers' product at the Government's prices, and does not yet make licensing mandatory, but the hand of the dictator is easily seen in Section 9 (industrial plans) by which no plan can operate unless the Governor-General

in Council (the Government) considers it "in the public interest." By its banking, industrial, and other Acts the Labour Government; has both importer and manufacturer at its mercy, and the latter cannot profit by the former's deprivation except on the Government's terms. The famous "insulation"l policy seems to envisage a degree' of replacement of the importer by the local manufacturer, but the Government will call the tune; and the concluding proviso of Section 9 (industrial plans) seems to render impossible any appeal to the Courts, as the regulations are declared to be themselves conclusive proof that the consultative requirements (as between manufacturers and Govern-j meht) have been complied with. To all this. 1936 Socialisation of the farmer (in exports), the manufacturer, and the importer must be added (in 1937) the consumer, for last year's amendment of the Primary Products Marketing Act, 1936, set up the Internal Marketing Division, and empowers the Government to fix prices and conditions of sale for dairy produce, fruit, honey, eggs, and "such other foodstuffs" as the Government pleases. When Mr. Savage makes the claim that the Government has satisfied both producer and consumer by its control of butter, cheese, fruit, honey, and onions, the answer must be sought from each producer and from each housewife. Have they found their economic heaven? Meanwhile, the old. problem of producer, consumer, and intermediate links lias not yet been solved by the mere institution of the Internal Marketing Division. ~ / Opinions may differ as to whether Government ownership of produce for export, and Government price fixation, are good or bad; but there can be no denying that the Government is pledged to this experimental policy one hundred per cent. And the same remark is true of State industrialism (Onekaka steel), State regimentation of secondary industry, State brokerage between producer and consumer in the internal market. The Government's acts and the Government's Acts speak for themselves; both dictate conditions incompatible with private enterprise. There is not room for two views that Labour marches to banking monopoly, to an ever-widening Government employership, and to "Socialism in our time," evidenced by foundations laid and promises made. Many votes cast in 1935 were de-pression-influenced votes, but the issue today is clear-cut, and we cannot believe that a majority of New Zealanders wish to see the whole population either employed by or abjectly dependent upon the Government, or wish to become automata in a Socialist community.