TO MEND-NOT TO END

Evening Star, Issue 22142, 24 September 1935, Page 6

TO MEND-NOT TO END

HON. W. D. STEWART'S PLATFORM STANDS AS INDEPENDENT NATIONALIST '■ While the Labour Party and the Democrats wish to end the • Government, I wish to mend it,” said the. lion. W. Downie Stewart, in the bourse of an address to the electors' of Dunedin West last night in Hunts Hall. “ In order to achieve this object, I am .standing as an Independent Nationalist, reserving the same right of free criticism that I have exercised the last three years, but giving a general support to the Government except whore I differ from it on fundamental principles contained in parts ol its legislation.'’ The meeting was a very largely attended one, over which Mr W. It. Brugh presided, and the speaker was given a most attentive hearing throughout. At tile outset Mr Stewart staid lie thought it advisable to hold an early meeting in order to try to clarify the position as he saw it at present, and in order to contradict various rumours in the electorate that he was going to the Upper House,, or that he was going Home as High Commissioner, or that he was going to Samoa as Administrator. Ho intended to contest the election as an Independent Nationalist. “ I think that for various reasons it would be a mistake to oust the present Government at the present time,” said Mr Stewart. In the first place it seems clear that wc are emerging with some success from the long depression, and experience shows that political changes and uncertainty check business recovery and enterprise. There are signs of recovery on all hands i whether we look at the trade figures, the banking figures, factory production, or other indications which mark the trend of events. It is true that the recovery both in this country and elsewhere is local in its nature and may not maintain itself. In fact, my opinion is that nothing but restoration of world’s trade can restore prosperity on a wide basis, and that until world trade is restored there will continue to bo millions of unemployed in various parts of the world; but so far as New Zealand is concerned' the Government is entitled to credit for having faced the position with courage and for having done many unpopular but necessary things if onr financial position was not to get entirely out of hand. During recent years I have served as a Minister in three different Cabinets, and 1 have therefore a real and genuine sympathy for the men who have to do the job in hard times. I left the Ministry because I differed from it on the exchange question, and because the Prime Minister had just previously pledged himself not to i ‘rfere with it; but in view of the i :s the country, was faeng 1 have regained from any attempt to embarrass the Government or to encourage political confusion or instability. Retrenchment, curtailment of expenditure, and economy are always unpopular, but the countries that are emerging most successfully are those which have not shirked the necessity for doing these things. NECESSARY ECONOMIES. “ I differ from the Labour Party when they say that these measures of economy were unnecessary, and that wc could have carried on through the depression under full sail as if everything was normal and prosperous. If that was so, why did the Labour Governments in Australia find it necessary to cut down wages, pensions, social services, interest, and rent before we did? Mr Theodore proposed various currency schemes to avoid it, but the Scullin Government found as we did that common sense and stern necessity dictated the course adopted. “ The main argument of the Labour Party is that in cutting down wages wo destroyed purchasing power. It is true that from one angle wages are also purchasing, power, but they are also costs, and usually the largest element iu costs; so that if an employer had been compelled to go on paying full wages when profits had disappeared he could only have exhausted his capital and rendered unemployment far more acute than it is. The simple illustration of the individual who finds his income reduced and has to cut down his expenditure is exactly the same as the position of the Government. If ho does not cut down his expenditure he ends in bankruptcy. Therefore, any party which seeks to climb into office on the shoulders of public discontent due to causes beyond the control , of any Government can only mislead and disappoint the electors. If it claims support on real differences in policy that is another matter. “ But the chief reason why I think it would bo unwise to have a Labour Government at the present time is that wo cannot afford such a luxury. They have put forward a long programme of social reforms all involving heavy expenditure, and I do not think the taxpayer could bear the extra heavy burden of taxation that would be necessary to give effect to all these schemes, at any rate on the scale and at the rate which the Labour Party want to go. In fact, the Leader of the Labour Phrty has himself admitted that taxation is already too high. CABINET ANOMALIES. “ To come back to the Government, t have said that it should not be ended, but mended, and that in respect of two main features,” continued Mr Stewart.. “ In the first place Cabinet requires to be reconstructed, and had this been dono effectively _ iu response to public demand some time ago it is possible that much of the existing discontent would not have arisen. I am able to take an impersonal and objective view of this matter, and can speak freely, as I know the Cabinet from both inside and outside. One difficulty is that the Prime Minister is too passive and the Minister of Finance too active; and it is contrary to constitutional practice that real and nominal authority should be in different hands. Moreover, the fact that a layman is nominally Attorney-General really means that this high legal office is in effect vacant. In tho second place, the Government requires to ho checked in so far as some of its legislation has forced through measures without any adequate consideration of tho views of its own supporters, apart altogether from tho criticism of responsible bodies and citizens. This is a serious matter, because some of these items of legislation violated tho fundamental principles on which the parties making up the Coalition were based. “ The . Labour Party offered no real objection to these measures, as they realised that they would serve as useful precedents at some future date if they wished to go further. It was not a matter of unavoidable necessity in an unprecedented crisis that could lend justification to these measures. In my view tho object aimed at could have been reached by methods that did not violate the principles of public good* faith. 1 know how deeply the loyalty of Government members "was strained from the number who came is me for

advice. Indeed, I know of one sound and faithful member of the party who was on the point oi resigning, so strongly did he dissent from the course adopted in the Rural Final Adjustment legislation: but in :ui earlier example it” was quite incorrect for the Prune Minister to say that our public debt loan conversion scheme was on tho same basis as the great British Loan Conversion. The British Government did not break faith with its creditors, and wo did. NEW PARTY WOULD CREATE CONFUSION. “ It is for reasons such as these that | suv it may bo necessary to form a left 'or right’ wing of the party to insist that the Government gets back on to right linds. If, as appears probable as a result of this confused election, a, number of Independents and groups of moderates are returned to the House, and if they constitute a majority of the House, it should be possible out of these dements to fortify and recreate the National Party on such a basis as to restore principles of sound legislation. There ts in the present Nationalist Party a large body of representation reflecting tho .soundest and best elements in tho community, but on some occasions it has been overborne into passing measures which seem to bo dangerously unsound or unfair. Rising prices and returning prosperity may temporarily blind tho country to the fact that in some of our legislation fundamental issues of right and wrong have been ignored, but, believe mo, these breaches of principle will |bo cheerfully used by future and less moderate Governments as precedents for greater incursions into the realms of repudiation. It may be asked why was it that holding such views 1 .did not leave tho party? My answer is that any alternative in sight was worse, and any new party would only have created political confusion in the midst of the greatest crisis known to modern, civilisation. The fact is that long experience has shown that our parliamentary system only works satisfactorily on a two-party oasis; it therefore seemed to me politically unwise to encourage the growth of a third party if the matter could bo put right by other means, as I tliink it can. X'urtliermore, in considering what sort of Government is best suited to cope with our far-reaching problems I think that what is wanted is one that avoids reaction and laissez fairo on the one hand, and also avoids any complete abandonment of private enterprise and capitalism on the other. Applying this test it seems to mo that some of the new political groups that arc arising fall into the error of thinking it possible to restore the old system of unregulated and unrestrained competition. Even the Conservative Party in England has expressly abandoned this view. On the other hand, I do not agree with the Labour Party in their view that capitalism and private enterprise have so entirely failed that they must bo abolished. “ In spite of the present widespread unemployment and poverty I think it is possible to restore the present system so that it will again yield the rich harvest of prosperity and rising standard of living for all classes that it "yielded nearly all through the nineteenth century ; therefore, a middle course is likely to yield the best results, and the National Party most nearly approximates to this middle course. In some cases further extension of State control and direction may be necessary. All over the world Governments are being forced to interfere where the problem, is too great for private citizens to cope with. A good illustration of this is tho plight of our primary producers, whose whole livelihood was threatened by the action of Governments overseas. In coping with _ their problem the Government was quite right in refusing to restrain its efforts because the cry of Socialism was raised. Politics is a practical science, and whatever measures will secure the maxmum of security and happiness should be adopted. I am not an enthusiast in planning, because tho more you plan the more must the State intervene, and the more the State intervenes the greater must grow tho bureaucracy and the less will a maximum of liberty and freedom be loft to the individual; but in many directions it is clear that the State is being compelled to intervene whether it wants to or no. We need to maintain the best features of private enterprise, fortified and enriched by the best features of group or community life. MONETARY PROBLEM. “ Another question that looms large in the public mind is the belief that there is something wrong with our monetary system,” said Mr Stewart, “ They say tho problem of production has been solved, and that if wo reformed our credit and currency system to enable, the goods to be bought all would be well. Now, I am not one of those who jeer at the monetary reformers. Personally, I do not think wo have yet learned all there is to know about how to control credit and money. Tho ablest brains in every country are concentrated on this problem, and so far from being a simple question it is a very baffling one, and if there is any truth in any of the proposals that are regarded as unorthodox wo ought to keep an open mind and examine them carefully; but I may say that I cannot agree with the Labour Party in their view that all would be well if we made a Government- monopoly of banking. If the Government took over the trading banks it would still bo necessary to choose between borrowers and to examine their securities before granting loans. I do not tliink a Government bank would be in any heifer position to do this than the trading banks. Indeed in some respects the position would bo less satisfactory. If you have a Government monopoly of banking, then if an application was turned down the man who wanted accommodation or an advance nw I ' l have no other recourse. The Reserve Bank was created for the express purpose of controlling credit free from profits -nd politics; but so far as other aspects of the monetary question arc concerned I understand some currency reformers want another enquiry before a new tribunal, with a judge as chairman. I have no objection to that if there is a widespread demand for it, LABOUR PARTY. “ At a future meeting I will deal with tho details of tho Labour Party’s policy. Much has been said about their main item of guaranteed prices, but I can hardly believe that it will meet with support from the city workers. The effect will be exactly the same as the exchange depreciation, which had tho effect of lessening the workers’ real wages by indirect means. It does not seem to me that the workers will be willing to have their .wages reduced. If the Labour Party reply that they will raise wages for everybody all round then neither the farmer or anyone else is any better off. All you have

done is to alter (he value of your cur- | reucy, further depreciated your oxj change, and increased -the cost of imi ported goods. Other proposals of the Labour Partv 1 have mentioned earlier. THE EXCHANGE RATE. "• H is well known that 1 strongly opposed the raising of tho exchange rale and loft the Ministry because of this issue. Some political candidates and groups indicate as one of their main planks tho reduction of tho exchange to its old rate; but although I still think the raising of the exchange was a grave mistake for many reasons. 1 recognise that once it was raised it became ‘ fait. accompli ’ and farreaching consequences flowed from that. To attempt to reverse tho process now, cither suddenly or by degrees, without some marked change in economic conditions, would cause the same trouble and disturbance as was caused when the rate went up. It is clear that if the rate was suddenly reduced grave hardship would he caused to all those traders who have laid in stocks at the higher rale. As one Australian aptly said when the Australian rate was fixed; We have got up a .tree and we don’t know how to get down.” So that, while 1 think the action of the Government in raising the rate was a mistake, and that in reality it lias had a deflationary effect, yet I think to attempt to cancel it now would be an error. THE BUDGET. “ I am not making any detailed survey of tho financial position to-night; but it is only fair to say that I think tho Minister of Finance is entitled to credit for tho successful efforts he has made to keep our expenditure within our income, and to help various classes of the community. Ho has given an increase in salaries and wages to the Public Service, restored the old-age pensions, increased the pension rates for widows and miners and for dependents of soldiers whose pensions were reduced. He has also increased the economic pensions and enlarged the conditions under which a soldier’s widow can claim a pension. Besides this a special pension is provided for disabled war veterans. Funds are also being provided for free milk for children. Other concessions are provided for in the Post and Telegraph service. It is, of course, impossible to please everyone, but no one can deny that the Minister has dealt with some of the most urgent cases needing assistance. “ To sum up, then, the position is briefly this: Tho finances of the Dominion show a steady and indeed remarkable recovery; tho improvement has enabled concessions to be madein many 'important directions. Provision is being made to improve housing, enlarge public works, and carry out various social reforms. _ Most particularly, greater provision is made to help the unemployed. I think, therefore, tho electors would ho wise to support this policy and this Government rather than tho proposals and policy of the Labour Party, which in my view are unsound or impracticable.” After answering a large number of questions Mr Stewart was, on the motion of Mr S. M. Park, accorded a vote of thanks for his address.