DOUGLAS CREDIT

Rotorua Morning Post, Volume 2, Issue 442, 28 January 1933, Page 6

DOUGLAS CREDIT

ROTORUA LECTURE SYSTEM ADVOCATED TO GIVE FINANCIAL BALANCE CENTRAL BANK OPPOSED • There was a large and attentive audience in the Lyric Hall on Thursday evening to listen to an exposition of the Douglas Social Credit System by Mr. Hall-Thompson and Dr. Smith, two of the economists who have recently been attending the j gathering of Douglas Credit Societies at Okoroire. The Mayor, Mr. T. Jackson, was in the chair, and after introdueing the speakers, spoke of the progressmade by mankind during the past two decades, but said that with all this progress the simplest of problems, that of ensuring a full and complete existenee for every one, was as yet unsolved. The trouble was that everyone had concentrated upon production and had neglected the distribution. He believed that it was the duty of every citizen to endeavour to evolve a system of economics ensuring everyone the right to live, and this was the task before every intelligent person.

Mr. Hall-Thompson opened with the remark that they were all agreed that "things could hardly be worse," which me.t with some applause, and fcold his audience that he and Dr. Smith were there with a plain message, not a message of despair, but one of hope. Tracing the career of the originator of the scheme, Major Douglas, Mr. Thompson spoke of his studies of British industries and the discovery he made that no industry ever paid out sufficient in wages and salaries to purchase the goods it produced. He traced the growth of the Douglas movement which he described as the most important in the. world to-day and told how Dr. Smith, four years ago, had been the only person to prophesy that New Zealand would be soon in financial disaster. He had told the Auckland Chamber of Commerce that this year butterfat would drop to 6d per lb. Everyone of Major Douglas's warning in his books had come true. Australian Branches In Australia there were 80 branches of the system and it was the one topic of street conversation. „

Dr. Smith told the audience of the fundamentals of the system saying that the Douglas Social Credit Proposals offered the only scientific and permanent solution of the world's economic troubles. "What is the main trouble with the world?" he asked. "An inability to buy the great wealth it produces. The people of Australia, for example, can only buy about half of what they produce. "What is the reason for this? One reason is the introduction of maehinery. For every machine that is installed, dozens, perhaps hundreds, of men and women are put off. Machine power gives us a great capacity to produce wealth, but the resultant unemployment makes it increasingly impossible to buy the wealth produced. Thus we get the absurd spectacle of great poverty amidst great plenty. Want and abundance walk hand in hand. As the world progresses, most of the hard work of the world will be done by machinery ,and there will only be employment in industry for a very small percentage. "The second reason why there is not enough money to buy the goods produced is beeause the banks keep money in short supply. They trade in money as a commodity, and by keeping it scarce they are able to charge higher interest for the use of it. Power of the Banks When you study the subject a little you will find that banks have the power to create and destroy money at will. You will find that practically all the money in the. community has its origin in loans from banks and must be repaid, with interest. The banks do not make notes or coinage, but they issue bank credit, which functions exacty the same. as money. "You will find as you proceed in your study that this credit the banks loan to industry and Governments is really something that the community creates. Take away the community and its activities. There would therefore be nothing for the banks to issue credit against. "You will quickly realise that it is wrong for banks — private companies — to monopolise the issue of credit (which is money) when this^ credit is really a community creation. As we repay this money to the banks they cancel or destroy it, and this fact keeps the community chronically poor — even in periods of so-ealled prosperity. Taking Away Monopoly "Now, the Douglas Social Credit Proposals will take away this monopoly of credit, or money creation, from the banks and give that power solely to the Commonwealth Bank Board, to be called the National Credit Authority. The banks would still function as banks, but they would cease to lend the people the credit' the people create., and charge for the use of it. This one action would take away the greatest power in the world from private companies and give it to the nation, to whom it rightly belongs. "This done, the Douglas Propos;als provide for the creation of credit (or money) in exactly the same value as we create goods and services. If, for example, in a year we produce goods and services to the value of £500,000,000, then there must be £500,000,000 of purchasing power in the people's hands during that period. More money than goods means inflation and ruin. More goods than money (as at present) means deflation and ruin. But where money equals goods, we get prosperity — a prosperity only limited by our ability to produce wealth, which is unlimited. Back to Real Wealth "It would probably not be necessary to print any more notes, as bank credit, issued scientifically and debt free by the National Credit Authority, and' backed by the Real Wealth of the Nation, serves exactly the same function as Jegal tender, and is a perfectly costless creation. "To sum the whole thing up in a nutshell: For every £1 worth of

value produced we have to-day only about 10/- worth of purchasing power. Result: Collapse of industry and untold miser'y of the people. The Douglas Proposals will provide £1 of purchasing power for every £1 worth of value produced. Result: Prosperous industries and a happy and contended people." Appreciation On the motion of Mr. John Mitchell, seconded by Mr. Lewis, a resolution was carried that this meeting of Rotorua citizens and farmers of the district urges the Government to institute a full investigation into the present monetary system and the Douglas Social Credit proposals. A vote of tlianks to the speakers, moved by Mr. J. E. Martin and seconded by Mr. W. If. Gregg, was carried unanimously.