MONETARY POLICY

Wairarapa Times-Age, 13 March 1939, Page 5

MONETARY POLICY

PRIME MINISTER REPLIES TO MR HAMILTON NECESSITY OF “EQUATING PRODUCTION.” PUTTING INDUSTRY ON SOLID FOUNDATION. (By Telegraph—Press Association.) WELLINGTON, This Day. A reply to the statement of the Leader of the Opposition, the Hon A. Hamilton, asking for details of the change to be made in the money system, was issued on Saturday by the Prime Minister, the Rt Hon M. J. Savage. The Prime Minister said that people could only increase their standard of life by producing the things that go to make that standard in greater quantities. All that he was asking was that those increases should also be reflected in the incomes of the people. “There is nothing top-heavy; we arc laying the foundation that Mr Hamilton and his colleagues neglected for years, and we are getting the help o! all those with constructive minds engaged in industry,” said Mr Savage. “I wonder what Mr Hamilton has to say to that. What did he and his colleagues do toward building New Zealand? He is not giving much assistance today.” Mr Savage said he had never had much time for the prophets of gloom, and he had less today, when New Zealand was calling for something positive rather than destructive. “According to Mr Hamilton’s definition, I am one of the ‘money bugs,’ because he says himself that they are Post Office depositors, holders of life and industrial insurance policies, and members of friendly societies,” he continued. “We have done more to make it possible for the so-called ‘money bugs’ to invest in primary and secondary industries than ever Mr Hamilton has done. If he looks at the latest statistics he will see that the incomes of the people have risen since this Government came into power.

“He makes reference to alleged confiscation of savings by a process of inflation. There is no process of inflation, but during Mr Hamilton’s term of office those who had savings in the Post Office were not allowed to get relief work while those savings existed. I wonder what he will say to that. A “SIMPLE SUGGESTION.” “My simple suggestion in reference to the money system was that it should provide a buying power that would equate production, and unless that is brought about there will not be much advantage to the people of this country in increased production. If Mr Hamilton thinks we are going to use the Government printing press, or any other printing establishment, for the purpose of making people rich, he will have some more thinking to do. “People can only increase their standard of life by producing the things that go to make that standard in greater quantities. All that I am asking is that those increases should also be reflected in the incomes of the people. If Mr Hamilton knows of any other way to do it, I would be glad to have his advice. He says that the existing money system was good enough till we saw the end of the reserves.

“Mr Hamilton and his colleagues should be the last to talk about reserves, because when they were in office they pawned everything that they could get their hands on, including returned soldier securities, in order to establish a surplus in the Public Accounts. Now he says I am trying to ‘save my bacon.’

“I am trying to save the people of New Zealand from the experience of 1931 to 1935 by asking them to establish industry on a more solid foundation than it has ever had, and the people are responding to it; and if Mr Hamilton and his colleagues met them next week in the way of a general election he would find that out. However. I am far too busy to waste any further time in replying to the prophets of gloom.”