REDUCTION IN INTEREST CHARGES ADVOCATED

Rotorua Morning Post, Volume 1, Issue 73, 17 November 1931, Page 5

REDUCTION IN INTEREST CHARGES ADVOCATED

LABOUR PARTY'-S* POLICY STATE BANK TO GIVE PEOPLE, i : CONTROL OF FINANCE MR. A. F. MONCUR'S MEETING - : Taking as his text a reduction in the erushing burden^sP.. interest charges and a revision of the financial system oy the introduction of a State Bank to control the banking of the country in the interests of the people as a whole, the Labour candidate for the Rotora seat, Mr. A. F. Moncur, opened his campaign in Rotorua * ; last night before a capacity audience. Mr. Moncur was given a most attentive hearing and was accorded a vote of thanks and of confidence in the Labour Party with only one voice dissenting on the resolution. Mr. Moncur dealt at length with financial matters and appealed to, the electors to form their ideas for themselses and not buy them for twopence in the metropolitan dailies, which he contended, were largely the mouthpieces of vested interests. He strongly opposed the principle of the wages cuts which he said merely reduced the spending power of the people and contributed a bonus to the banks and financial interests.

The Mayor, Mr. T. Jackson, was chairman of the meeting and introduced the speaker. The socialisation of the means of production, distribution and exchange was stated by the metropolitan papers to be the policy of the Labour Party, said Mr. Moncur in opening his address, but as the official Labour candidate he denied that, as the phrase dealt with the objective of the party and not the policy. However, he did not apolo'gise for the phrase. Revolution was the method of the few, but in his opinion the present capitalist system was decaying away and by evo lution a thoroughly de-mocratie system would take its place. When the great body of opinion of the people reached a definite eonclusion, revolution was not necessary to enforce it; under a democratic Government it enforced itself. Increase In Vote In New Zealand in recent years the Labour Party had supported, or secured to be enacted, all reforms in favour of the people. That workers alone could not secure the emancipation of the working class, and that the assistance of the cultured class was necessary, was mere sophistry. However, the Labour Party had to strive alone in the consciousness of its own strength and fate if it was to achieve anything. In 1905 the Labour vote was only 3478, but in 1928 it had grown to 196,382. He predicted after the election there- would not be less than 220,000 votes for the Labour Party. Two Pas-ties Only The Labour Party had recently been severely criticised for its failure to link up with the, other two parties in this time of national crisis. The party's leaders would not aslc it to sink its individuality in this manner. If the other parties were politieally vital, they would not require the help of Labour and if they were, not, as he suggested, then they were not worth its help. There was room in New Zealand for only two parties — one the represe-nta-tive of vested interests and one representing the mass of the people. The Libe.ral Party, Mr. Moncur contended, was dead. Particularly since Mr. Forbes had returned from the Imperial Conference, it had sunk its identity and linked up with the very party against which the late Ricliard Seddon had fought for a lifetime. Attitude of Press So far as the local press were concerned, he had always received very fair treatment, but the large metropolitan dailies were mostly controlled by vested interest and he asked them to think out the matter for themselves and not buy thoughts ready-made. Such thoughts were only worth the price paid — 2d (Laughter). Dealing with the control of credit, the speaker said that credit was based more on faith than on gold. Most people were hampered because they could not buy what they wanted. This was because there was not enough money to go round. 'Money was master, and men were slaves. Money was in reality tickets, and if thought of as food tickets they would realise they were in the hands of those who controlled money. A railway company would not issue tickets against a supply of gold, and there was no reason wliy food tickets should be so based. Gold Standard and Wages Proceeding, Mr. Moncur described the recent wages cuts as a "raid upon the standard of living of the people." Independent critics who had investigated the matter, men like Professor Belshaw, of Auckland University, Mr. A. N. Field, author of the recent book "The Truth About the Slump," and Mr. H. G. Cole had given it as their opinion that the cuts were brought about more by the financiers standing behind the gold standard than anything else. The speaker briefly outlined the number of times the gold system had broken down. Within three years of the re-establishment of the gold standard in 1925j the banks in England withdrew £75,000,000 in notes from

eurrency, and this accounted for the drop in the prices of produce through lack of purchasing power. People were be-fooled into believing that the only method of ending Ihe depression was by wage cuts. The gold standard had proved altogether inadequate in the face of the extraordinary conditions created by the war and had been suspended to allow a loan to be raised which permitted the young men to be sent off to the front, in many cases to be shot. Yet now, under present conditions, the Government would not raise an internal loan to save the wives and children of those men from starvation. (Applause.) "Fraudulent Standard." Infiation in England still equalled £2 10s per pound sterling, so they could realise what would happen if they still further pei'sisted in deflation. The gold standard was a fraudulent standard and every intelligent voter should realise '°that eurrency should increase in ratio with increased production. In other words it was impossible to finance 1931 in terms of 1900 eurrency. Two million peo-

ple could not be financed on the eurrency for only one million. The present position of America with 11,000,000 out of work 'was a striking example of unscientific handling of the eurrency. England had been forced off the gold standard, and it was hardly likely that she would return to it. Any outery against infiation came from the bankers, who wanted infiation of credit and not of eurrency. This was because inflated credit bore interest and inflated eurrency did not. Banking Question Touching on the banking question the speaker said the bank-manager did not come into the ^argument. There was nothing personal in the question, which was purely economic. There could be no great progress in the Dominion until the pressure of interest was eased. There was noth^ ing fixed in economics and conditions were always changing. Economists of the eighteenth century sought to prove that the working man was on a level with an animal, and was a commodity dependent on the State of what was called the wages fund. Before the was somewhat the same theory was served up in ngw language. The bank rate was another theory which had proved not capable of doing what it was supposed to do — control gold. A bank did not lend capital — the. owners of capital pledged • their property and paid interest thereon to the banks. Interest Back to Three Per Cent The total national debt was £84,000,000 before the war in New Zea-r land. Since the war local bodies and Governments had added tremen7 dous loans, and the volume of interest had more than quadrupled. This accounted for the Dominion's burdens as greater production was ne- - cessary to balance the profit and loss account. These higher charges reacted on all the materials wanted for public works. The more prices dropped the more products were neces--sary to pay for these burdens. For years bank-manufactured eurrency had made prosperity, but suddenly the word was given to stop this credit with the result that with the refusel of bank credit to men whose securities were beyond question depression resulted. & Post-war problems could not be solved by pre-war methods. The Labour Party stood for an alteration in this but they did not stand for .increase of eurrency by the printing press. They did say, however, that the amount of credit available should be according to the increase in products, and this could only be brought about by a State Bank. The reduction of the annual interest bill was a fundamental necessity. The annual amount of interest on national and local body debts combined was £15,325,379. He said advisedly, without fear of being called an advocate of repudiation, that their only hope was to bring the interest rate back to 3 per cent and 4 per cent. Sweated Labour. Prosperity could not be brought about by cuts in wages, such as that on the purses, which was as close to sweated labour as could be found in New Zealand. (Applause,) Cuts should be put on interest recedvers and bondholdCrs. (Applause.) It was f olly to f eed the overseas bondholders at the cost of starvation in New Zealand. Banks created credit to enabla pnople to take up war bonds, and these must be again converted into fluid capital. The constant cry that wages must be reduced was folly, for nowhere in the world were wages low enough to suit financiers. So far as cuts were concerned, it had not only reduced the spending capacity of the wage earners'but had presented a bonus of £40,000,000 to the bondholders in the country who had not had to suffer any salary reductions. The Labour Party contended that the control of the, financial organisation of the country should be in the hands of the people and not in those of private money making concerns.

State Bank The Labour Party stood for a State bank. The Country Party advocated an agricultural bank, which was practically the same thing. Banking in Ne,w Zealand was at present in the control of six institutions, whose representatives met annually in Wellington to determine the amount of credit to be issued and the price to be paid for it. The Government nominees on the Bank of New Zealand direetorate had more control over industry than all the farmers in New Zealand. The finances of the Dominion should be controlled by and for the people, instead of by some six financiers. The unemploy-- ; ed had been put to non-productive ! works through schemes 5, 4a and so on, because the markets were already glutted with goods, and it would not suit financiers to have more production. It was impossible for any increase in production and prosperity to take place when the barrier of the pove-rty of the people stood in the way. If a State Bank was introduced, however, it would place the control of credit