DOUGLAS CREDIT

Hokitika Guardian, 23 August 1933, Page 7

DOUGLAS CREDIT

RAISING PURCHASING POWER. FINANCING THE CONSUMER. AUCKLAND, August 21. With the object of acquainting its members wbh the case for end against the Douglas credit system, the Auckland Creditmen’s Club i recently arranged for two, addre.sse g to be given from opposing angles. The first of the lectures, which was in support of the system, was given by the Rev. W. W. ’AveriH. 1 Some people, said Mr Aver ill, imagined that to be an advocate of Doughs credit was hardly respectable, associating it with a new kind of Bolshevism. That was because the proposals wer© new to New Zealand and because an attitude of ridicule had been fos-. tered in certain quarters, but the system had been advocated in England for 10 years and had gained the support of many notable thinkers. When such men as the Rev. P. T. R. Kirk, geneva] director of the Industrial Christian Fellowship, and vicar of Christ Church, Westminster, and the Rev. Hewlett Johnson, Dean of Canterbury, advocated Douglas credit principles in a book, “Christianity and the Crisis,” published with the imprimatur of the of Canterbury and York, one could at least he satisfied th-.t as a, supporter of the proposals one was in respectable company. Profe?so r Belshaw had said that 'among The ranks of economists there were no supporters of Douglas credit, but Major Douglas himself had ia worldwide reputation. .as a scientist and economist; ■ He had given evidence before the MacMillan Commission and the Canadian Government, and had addressed learned societies in -oil countries. Professor Irvine, formerly professor of economics at Sydney University, was .writing articles i.n support of Doug, •las credit in the New Era. and Arthur ICitson, for 30 years president of the British Currency Reform Association, was now definitely an advocate of ■Douglas credit. ' „ It was on unfortunate fact of history that every great discovery in the reaJm of science , and every great move, forward in the progress of civilisation had" : been accomplished in the teeth of' the fiercest opposition from the experts, . who were experts'Only-in the outworn ■systems then existing. -Future generations might marvel that there were ■ educated men to-day who could seriously oppose Dough-s credit.

THE CREATION OF CREDIT. ,■ The main trouble with the world at the present time was an-inability to buy .the great wealth which it produced, due firstly to the introduction of machinery,' which, ‘•while 'increasing' the capacity to produce wealth, created unemployment, .which made it difficult for the people to buy the wealth-so produced* and due secondly to the" fact that the banks kept money in shortsupply, thus making it" possible to charge higher interest, for the. use of it. Professor Belshaw* admitted that, the banks cheated credit, but- clainv’d that, after the repayment- of the 'debtf iplus interest, the advance- actually remained as ’ purchasing power in the form of deposits, forgetting that the .original loan must be recovered from the public before it could be repaid, thereby cancelling deposits to the amount of the original loan. The transaction represented no issue of permanent purchnsinw power, as the whole was extinguished when the debt was repaid. The Douglas proposals involved the taking over bv the community from the banks of the control of the creation. issue and retirement of money. Through its representatives. the community at present provided itself with the services it reoui red, such as transport, education, defence, iustice and post and telegraphs, yet it left its most vital service, its- money/ system, to the control of private companies, the banks, whose' directors ad i ministo'’Od it in the interests of. their shareholders and saw to it that it v.»"S issued only as a debt, bearing interest. PROVISION OF MONEY. The community, said M r Avei'ill, had a right to provide itself with the money it required without payment of interest to any .association of private .persons. That was not intended to 'be an attack on bankers; under Ma jor Douglas’ system, banking would retain its proper and well-conducted system of noting as guardians of the people’s savings and the task of financing the productive side of industry. The first step under the Douglas credit system was to form a. N tiom] Credit Board, not subject to interference by Parliament, to be the sole authority for the creation, issue and retirement of money and credit. The community must create money, not according to any arbitrary standard, such as gold, but according to industrial and economic requirements. It was no longer possible to maintain the fallacy of the gold backing of currency ; during the paot- 20 years the gold holding of the 'Bank of England varied from 'i8130,000,C00 to £150,000,000, .whereas the actual currency in circulation was approximately £600,000,000 and eredi* operated <m by cheque had been in the vicinity of £60,000.000.000. What kind of basis could £130,000,000 bear to £60,000,000,000? If the amount of gold in the value,:; of a country had any 1 effect upon its buying power then the ’United States to-day should be a perfect p'j _adi.se.