Thanks jamie, I bow to superior research.
It is possible that the 20% allowed Rushworth to influence the original setup. It was always claimed that he had done so, and he was in Parliament before 1935.
Regards.
John R.
Date: Mon, 18 May 2009 04:51:41 +0100
From: eurojamie@gmail.com
To: socialcredit@elistas.com
Subject: Re: [socialcredit] question regarding Australia and New Zealand during the Depression
John, no the RBNZ was established as a mainly private (80% private/20% public, if I recall correctly) central bank in 1934 (this brochure does not give much information, but it gives the date of establishment: http://www.rbnz.govt.nz/about/museum/2772493.pdf). When the first Labour Government was elected in late 1935, nationalising the Reserve Bank was one of their first Acts of Parliament in 1936. The private shareholders were bought out in full, unlike what happened with the Bank of England in 1946, where stocks were exchanged for perpetual UK Government bonds (if I recall correctly).
I went to the Parliamentary Library in Wellington last year and read the Hansard accounts of the session. From what I recall, the Parliamentary session for the passing of the Act nationalising the Reserve Bank was supposed to be broadcast live on national radio for the duration, as this was promised to the people by the newly-elected politicians, but the transmission was stopped after a little while. This issue was raised in the debate by John A. Lee, who wanted an explanation (I think 'technical difficulties' was the explanation given, but I can't recall fully). The Hansard accounts makes lots of very interesting reading: many of the newly-elected politicians spoke out strongly about Montagu Norman's role in assisting Nazi Germany with finance and favours.
No, John A. Lee was not a social crediter, he thought they were too soft. In his memoirs he made a comment along the lines that he thought they (social crediters) would provide people with homes, but let other people steal them off them again (or words to that effect). In the memoirs, Rushworth was on good terms with Lee, as was Hargest, a conservative from the other end of the country. It must be a brothers-in-arms thing (most of the Labour Cabinet were conscientious objectors).
Anyway, I better stop now.
2009/5/17 John G Rawson <johngrawson@hotmail.com>
Jamie, just one correction re the NZReserve Bank. I believe it was set up in 1936 rather than having a previous private organisation nationalised. And a lot of the influence on its liberal structure came from Rushworth, Leader of the Country Party with, I think, two other Members of Parliament and an Independent, Harry Atmore to help him. He was Member for the Bay of Islands, (my parents supported him), studied SC and became convinced it was right, and later led its organisation. He and others were responsible for the cooperative meat export scheme (AFFCo) operated by Auckland Federated Farmers, covering the northern part of the North Island. Rushworth had, I believe, degrees in Law and Engineering. He lost a leg in aerial combat with the RFC, wounded with tracer fire. He flew again, using a rubber band on the rudder bar, and when finally shot down, when falling out of control, shot a German plane out of the sky as it crossed in front of him. The Germans tried him on a charge of firing when disabled or something of that order, but their very correct military code saw him not guilty. They also spent a long time wondering how a one-legged man managed to fly, because the rubber band was lost in the crash. Interesting the both he and Lee (who was not a Social Crediter) both were amputee war heroes.
John R.
Date: Sat, 16 May 2009 09:20:33 +0100 From: eurojamie@gmail.comTo: socialcredit@elistas.com
Subject: Re: [socialcredit] question regarding Australia and New Zealand during the Depression
Dear all,
Over many years Vic Bridger has published, in his excellent journal (probably the best social credit journal around), excerpts of articles about the uses of the Commonwealth Bank from 1911 to 1924, and its off-shoots subsequent to that (after the main bank was taken over by orthodoxy in 1924). The Story of the Commonwealth Bank booklet (available from Veritas in Western Australia and Bloomfield Books in the UK) covers the story of the main bank and some of its off-shoots, but evidently from Vic's journals, not the whole story.
I can give a potted history of the background to the establishment of the Commonwealth Bank, as I have an authorised biography of the person who got it established.
The Commonwealth Bank was established by the ceaseless agitating and political guile of an American, King (that was his given name) O'Malley, who pretended to be a Canadian so he could get elected to Parliament (first in South Australia, then in Tasmania, then to the Australian Federal Parliament on Federation in 1901). King O'Malley probably had one of the most incredible lives that anyone in history could have ever had (it is impossible to describe it all even briefly here). In his youth he worked for an uncle in a New York bank, and that is where he discovered from the inside what banks do, and he would also have been aware of what the "Greenbacks" did (and still do, to a much more limited extent), since they made up a significant portion of the money supply at that time (1870s). After a while he suggested to his uncle a new way that a nation could run its finances, his uncle said that it was a good idea, but that people were not ready for it(!). King O'Malley journeyed to Australia in the 1880s and became a leading proponent of Australian Federation, and after that was achieved he was able to turn his uncanny powers of persuasion to have an Australian Capital Territory established, and a Trans-Continental Railway built, and a Commonwealth Bank established and used to finance the nation, and a monumental national embassy built in London, Australia House (which is still standing proud as Australia's window to the world in London). It is probably fair to say that King O'Malley is the politician, if not the person, who has single-handedly done more for Australia than any other, but today hardly anyone in Australia, or anywhere else, has even heard of his (easy-to-remember) name.
The Australian Federal Government took over the currency note issue from the private banks in 1911 and from 1912 the Commonwealth Bank took over a significant portion of the credit issue as well. It financed the building of the Trans-Continental Railway, the Australian Steamship Fleet (to combat Lord Inchcape's monopoly), pools for agricultural produce like wheat, etc., etc. Most of these activities were curtailed in 1924 with a change of Prime Minister with close connections to the English banking system. However, from what Vic and others note, some similar such financing activities were carried on by off-shoots of the main Commonwealth Bank for many many years after 1924.
In the late 1920s/early 1930s New South Wales Premier Jack Lang tried to repeat the success of the Commonwealth Bank at the State level, but was eventually blocked by the Federal Government, and was ultimately dismissed from office by the Governor (the representative of the UK Monarch in NSW).
In New Zealand it was another exceptional politician, John A. Lee, whose amazing life is perhaps only eclipsed by King O'Malley's, who used his uncanny mastery of oratory and literature to get the Reserve Bank of New Zealand nationalised in 1936, and then used to build many thousands of houses, as well as other public works and capital projects for primary productive industries, particularly dairying (which from that time became New Zealand's largest industry, but it is almost certain that it would not have been half as large without Reserve Bank finance for development over many decades). Envious articles appearing in Australia, which at the time was suffering terribly under the so-called "Premier's Plan" (read Banker's Plan), were describing New Zealand as having been restored to a paradise by 1938, i.e. only 2 years after the programs of the first Labour government were first (and only partially) implemented in 1936. Some of the many Reserve Bank-funded schemes that developed in New Zealand carried on 'under the radar' until the second term of the fourth Labour government (which started the 'neo-liberal reforms' in 1984) in 1987/1988(?) - the Reserve Bank Amendment Act of 1988 seems to have removed the key financing provisions, although perhaps not.
In both cases, a single exceptional politician was able to get sweeping unorthodox reforms passed with the support of a 'torpedo gang' of 10-12 trusty colleagues in expertly 'organised' caucus meetings. In both cases these reforms were bitterly opposed by the Prime Minister and Finance Minister, and the banking fraternity, but they were carried by the need to placate the popular opinion of a significant proportion of the 'rank-and-file' constituency who demanded it as an election promise. In the case of New Zealand (1930s) this was at least partially assisted by the Douglas Social Credit movement, which was formally established in New Zealand in 1934, but had roots going back to the early 1920s. In the case of Australia (1900s-1910s) this was probably at least partially assisted by the Single Tax movement based on the ideas of Henry George, and by the influence of British and American monetary reformers such as Arthur Kitson.
A similar case occurred in Canada in the 1930s; again an exceptional politician, G. G. McGeer, used his powers of argument to get the Bank of Canada nationalised, and then used to issue credit for public purposes, and again this was at least partially influenced by the Social Credit movement, and knowledge of the "Greenbacks" in the USA and the Guernsey and Jersey currency issues.
As for the Goldsborough Bills (there were several attempts) in the USA in the 1930s, these did not get the level of support required by the US governmental system, but again they were at least partially influenced by the Social Credit movement, and obviously knowledge of the "Greenbacks" in the USA (and perhaps the experience of Australia, Guernsey and Jersey currency issues). The article excerpted and linked in Iain's post is from The Pilgrims of Saint Michael, not Michael Hudson.
I know the nay-sayers on this list will be frothing and foaming at the mouth and spewing bile in a fit of pique about all this, but they can't change history for those of us who know it and have lived it. I await the onslaught of attacks with boredom.
Cheers,
Jamie.
2009/5/6 William Hugh McGunnigle <wmcgunn@maxnet.co.nz>
HI Jim
Despite that Mike Savage was not a monetary refomer,. and although he is credited with pulling NZ out of recession, it was the monetary reformers that stimulated his government to use Reserve Bank Credit to do the infrastucture jobs that were instrumental in restoring the NZ economy to full emploument. The refusal to pay interest on loans incurred by previous governments caused the govenor of the Bank of England threatened to to freeze all NZ assetts held in London if he continued the practice of using Reserve Bank Credit instead of borrowing from the commercial sector. His government backed down very quckly after that threat. Fortunately for NZ WW2 broke out very soon after this and Britain needed every bit of NZ produce it could obtain to further its war effort. At the close of WW2 NZ had a very positive Balance of Trade account both with the UK and the USA. This helped to fund the improvements in the standard of living experienced in NZ in the immediate post war years. Savage was no doubt a very fine PM, but he was an "orthodox economiost" not a monetary reformer and this is frequently ignored when discussion of that government's financial performance is conducted. Much of the prosperity for NZ during the Savage era and just after came about because of the conditions directly relating to WW2. The same applied to a certain extent to Australia.and Canada. IN the USA WW2 enabled the Rousevelt government to channel massive amounts of funding into armaments and thereby ensure full employment and prosperity, ALL Borrowed from the Federal Reserve Bank. This left the USA with enormous debts which it is still paying off today. I hope this clarifies some of the situar-tion with respect to the Savage government in 1935--1940. John Rawson is a better authority on that era than I am I hope hge can clarify the position still further.
Bill MC Gunnigle
----- Original Message -----
Sent: Sunday, May 03, 2009 7:27 PM
Subject: Re: [socialcredit] question regarding Australia and New Zealand during the Depression
In the 1930's New Zealand, under the guidance of PM "Mickie" Savage refused to pay the interest bill to the Bankers in London. Instead he used the money to kick start the economy in the interests of the New Zealand population and as a result was kept in office for the next fourteen years. When he died, the population en masse crowded the railway stations to honour the man who was guided by the needs of the population ,as his cortege passed through the countryside. This was the contrary of what Robert Menzies did when the demands of the English bankers were presented to Australia by Otto Niemeyer , and his partner Mr. Hugo Gregory. Menzies told the Australian public that they were honour bound to clear their debt to the London bankers, which they did, and Australia continued to suffer the deprivations caused by the "Great Depression"!!! for the next five years.Shortly thereafter, Mr. Robert Menzies became Sir Robert Menzies!! Is more comment needed?
On 03/05/2009, at 7:32 AM, John G Rawson wrote:
In view of bill Ryan's announcement, I hope this gets through because this topic had not run its course.
NZ's State housing Department was a normal Govt. Department, funded according to the annual Budget. I can think of no reason why it would pay 1% on its funds to the Govt., which certainly did not run up debt to its own Reserve Bank. I think that reference is confused with other operations for local bodies and private industry Boards. Apple and Pear marketing was another cooperative.
In forming our own Party policies, which include this sort of action, we have decided that the amount of new money needed will be limited, perhaps very much so. Money of this nature used for government expenditure (small g., including any Dividend paid.)would be debt free. But for Local Bodies, it would be necessary to spread what was available round as low interest loans, available to others as the first recipients repaid them. This is basically what was done in the 30's.
Whatever the method, badly needed money was put into circulation. And in those days, the trading banks were bound byreserve ratios, so Res. Bank money coming to them increased their base for lending.
Regards.
John R.
From: johngrawson@hotmail.com
To: socialcredit@elistas.com
Date: Sat, 2 May 2009 04:15:56 +0000
Subject: RE: [socialcredit] question regarding Australia and New Zealand during the Depression
Graeme, there's history somewhere about the founding of the Commonwealth Bank, and its financing of the Commonwealth Fleet (of merchant ships) to get your produce overseas. And possibly other activities. I read the story many years ago and forget the detail.
Regards.
John R.
> From: telergy@bigpond.com
> To: socialcredit@elistas.com
> Date: Fri, 1 May 2009 22:39:01 +1000
> Subject: Re: [socialcredit] question regarding Australia and New Zealand during the Depression
>
> News to me too, in Australia.
>
> Although our coins were all produced by mints which were owned by The
> British Mint until the 1960s, Australia did print it's own notes from 1915
> by a "Note Printing Australia" since 1915 or so. This was and is owned by
> our Reserve Bank,
>
> As to whether there was "monetary seignoriage" to bail us out of the
> depression, I will keep looking. Where's John Herman?
>
> Graeme Taylor
> ----- Original Message -----
> From: <william_b_ryan@yahoo.com>
> To: <socialcredit@elistas.com>
> Sent: Friday, May 01, 2009 9:00 PM
> Subject: [socialcredit] question regarding Australia and New Zealand during
> the Depression
>
>
> >
> > Ellen Brown is not defending her arguments at the present time, but is
> > focusing "on the more important work of exposing what is really going on
> > in the economy today and suggesting better solutions," so I'll put this
> > question to the list, and especially our Australian and New Zealander
> > subscribers. Perhaps someone will get back to us on this:
> >
> > It has to do with her assertion that during the 1930s and 40s, the central
> > banks of Australia and New Zealand accommodated their governments to spend
> > Greenback-type money into circulation for infrastructure projects, thus
> > helping those countries to avoid the effects of the Great Depression. For
> > example, in her essay dated March 6
> > http://webofdebt.wordpress.com/monetary-proposal/ she wrote:
> >
> > "A truly federal central bank would issue funds directly to the Treasury
> > as debt-free U.S. Notes, or as 'national credit.' This was done
> > successfully in Australia and New Zealand during the 1930s and 1940s. A
> > state-owned central bank funded public projects that put people back to
> > work, at a time when most of the rest of the world was struggling with a
> > depression brought on by a global shortage of bank-created money."
> >
> > This is news to me. Where did this come from? I am not aware that either
> > government did anything especially innovative or unorthodox during that
> > period.
> >
> > I am presently converting into plain text a document sent to me by Wally
> > Klinck, "Major C. H. Douglas Before The New Zealand Government's Monetary
> > Committee Notes of Evidence and Examinations With Correspondence
> > preliminary thereto" from 1934. This statement is from one of the initial
> > questions to Major Douglas, on February 24, 1934:
> >
> > "In this country we are suffering from an economic depression and it is
> > commonly known that we are suffering severely in consequence. How can
> > that be remedied in a land of plenty, and we have a land of plenty and
> > there is poverty and stress everywhere?"
> >
> > So from this question we know that any Greenbacker-type policy that might
> > have been introduced must have been introduced after this question was
> > asked, if New Zealand was relieved from the Depression before other
> > nations.
> >
> > This piece from the Internet suggests that New Zealand's monetary policy
> > helped that country recover from the Depression, but it says nothing about
> > Greenback-type money being spent into circulation. It says specifically
> > "fiscal policy was not the driver of recovery from the Great Depression."
> > http://antidismal.blogspot.com/2008/11/new-zealands-recovery-from-great.html
> >
> > I have also been studying the book, *Recovery from the Depression* By R.
> > G. Gregory, N. G. Butlin, published in 2002, which is a compilation of
> > several essays by various authors discussing the Depression experience in
> > Australia and New Zealand. Chapter 5 entitled "Depression and Recovery in
> > New Zealand" by G. W. Hawke is available online from the archive at
> > Googlebooks. I've seen nothing in that chapter that talks about
> > Greenback-type money.
> >
> >
> >
> >
> > ---------------------------------------------------------------------
> > Some introductory materials to the discussion topic of this list are at
> > http://www.geocities.com/socredus/compendium
> > You're subscribed to this list with the email telergy@bigpond.com
> > For more information, visit http://www.eListas.com/list/socialcredit
>
>
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