LABOUR POLICY

Waikato Times, Volume 119, Issue 19887, 16 May 1936, Page 4

LABOUR POLICY

ATTACK BY MR COATES. DANGER OF CREDIT CONTROL. "A PRODIGAL PROGRAMME." WELLINGTON, Friday. A warning against the dangers of socialisation and Inflation which he claimed were the essential features of the Government’s policy was given by the Right Hon. J. G. Coates addressing the National Party Conference at Wellington this week. “It seems to me that the people have shown themselves definitely susceptible to the cry of ‘easy money’." Mr Coates said. “Has the new Government the secret of giving something for nothing? I say it has not, and that if we embark on a prodigal programme of exceeding our income regardless of cost we are heading for inflation, financial chaos and national disaster." The full extent of the Government’s legislative proposals was not yet known, Mr Coates continued, but under the three main headings of oredlt control, socialised production and the domination of industry by unionism, there was sufficient already to cause people to view the future with alarm. The powers taken by the Government to control credit and currency were such that no thinking person could view them with equanimity. Safeguards Removed. “The position to-day is that all credits in the Dominion can be called up and used by the Government. These credits are composed mainly of the difference between advances and deposits, free deposits, short dated money and overseas credits lying in the hands of all financial institutions. They are all at the disposal of the Reserve Bank if the Government so demands. I figure that approximately £136,000,000 could be available, but if those resources are rashly drawn on the result will be the complete destruction and disorganisation of business and the smashing of confidence between borrower and lender, on which we depend for a sense of security. “I do not say that the Government would go right to that extent, but the safeguards have been removed and the danger is there if only people would realise it.

"Disaster Ahead.” “Primary production is the main industry of the Dominion,” Mr Coates continued. “Indeed, it is the lifeblood of the country, but under the Government’s proposals disaster lies ahead. A population of 1,500,000 cannot possibly afford guaranteed prices, which may he considerably in excess of world prices. If prices are raised artificially to a point which encourages over-pro-duction the greater will be the danger of an entire financial collapse. Under the Reserve Bank Act we can guarantee what the product will be worth If the -guarantee is met by the creation of credit the guarantee will simply be cancelled out In high costs. Through the principle of compulsory unionism," Mr Coates continued ‘the control of industry will be virtually handed over to the workers. This is an attack on the so-called capitalist which entirely ignores the fact that the direction of industry by the employer Is largely responsible for the livelihood of his employees. There must be co-operation between the two, but it seems that the Government is blind to that. The basic wage and the 40-hour week must both increase costs."