Well first up, I want to apologise for the lateness of this review. In mitigation, I will offer the excuse that my birth was still some years in the future when the book itself was published in 1936. I managed to get hold of a copy recently after a search on the Internet turned up a signed first edition at a bookshop in Symonds Street, Auckland.
Why was I searching? I’m a long-standing proponent of monetary reform – a firm believer that most of the world’s ills stem from the fact that ninety per cent of the money governing every aspect of human life on planet Earth is created as interest-bearing debt by private bankers. And not until the power to create money is removed from private interests and vested in the state, the government and the people who elect them, will true social justice ever become an achievable goal.
Back in the late 70s and early 80s in New Zealand I was actively involved with a political party/pressure group arguing for monetary reform. I stood twice (unsuccessfully) as a candidate for parliament in 1981 and 1984. I saw close up the dirty tricks the forces of reaction would stoop to ensure the Social Credit Political League was wiped out as a voice of reason in a system designed to maintain a corrupt and unjust financial structure.
Recently I have been heartened to see a re-emergence online of individuals and organisations arguing for Positive Money. It’s long overdue. The case is irrefutable. The main stumbling block is public ignorance about how money actually works. The Money Power Elite use this ignorance to maintain a grotesque system that keeps most of the world’s population in poverty and slavery.
The author of “New Zealand at the Crossroads” was Henry J Kelliher, knighted by Queen Elizabeth II in 1963 for his “services to Philanthropy”. It may have helped that he was one of the country’s richest men as a result of being owner/founder of Dominion Breweries, one of the two companies that produced most of NZ’s beer. Nevertheless, the case for Sir Henry’s philanthropy may have a better foundation than other mega-rich claimants to the title in our days.
In 1956 he set up a trust to administer an annual award for promising painters, and some of the NZ art world’s biggest names were early recipients. The award was discontinued in 1977, but a second foundation continues to present annual prizes for essays written by young students of economics.
I’ve searched online and I’ve been unable to turn up any of the subjects these young economists have written about. It also possibly detracts a little from Sir Henry’s reputation for philanthropy that his knighthood was put forward by a National (conservative) government at the time. “New Zealand at the Crossroads”, however, provides firm evidence that its author had a strong social conscience, and was at the forefront of the contemporary movement for monetary reform.
In fifteen chapters and 184 pages, Kelliher covered such topics as:
- The nature and function of money
- The social and economic disaster of unemployment
- The importance for all of economic security
- The urgent need for monetary reform
- The influence of the press in resisting reform
- The hypocrisy of the church in failing to fight for social justice
His first sentence announced that his book was “intended for those men and women who prefer to do their own thinking,” and he made a clear statement of intent in his introduction:
“It must be evident that a government which does not recognise as a fundamental duty the function of issuing all new money, and of controlling and regulating all money in circulation does not control the affairs of the country, nor is it safeguarding the welfare of the people. Such a government may govern but does not rule, because the real control of the country is in the hands of the ‘Invisible Government’ – the Money Power.”
In November 1935, in the depths of a global economic depression, and suffering more than most its socially destructive effects, New Zealand voters overwhelmingly elected the country’s first Labour Government. The main reason for Labour’s broad appeal, to farmers and owners of small businesses as well as wage-earners and the unemployed, was its “pledge to the people of New Zealand to take control of its own money and credit.” And they were not alone. According to Kelliher, “In Italy, Germany, Russia and Japan money [had] recently been put completely, or almost completely, under control of the governments of those countries.” Such a claim might cause one to wonder whether there was a more sinister agenda behind the demonisation of those countries in years to come. Whatever the case, Sir Henry argued that “There [was] ample evidence of a deliberate and well-planned conspiracy to keep this truth and knowledge from the people by those who hold this all-powerful monopoly to manufacture money and to conceal or disguise the unsoundness and iniquity of the existing system.”
That New Zealand Government after 1935 did indeed attempt to implement its pledge first and foremost by converting the NZ Reserve Bank into an entirely State institution, then using credit provided thereby to carry out a programme of house building that provided a stimulus to industry, jobs for citizens, and low-cost, high quality housing for the needy. The results of the programme saw that Labour Government beloved by the people, and its Prime Minister, Michael Joseph Savage, elevated to a status bordering on, or possibly exceeding, sainthood.
Sad to say, that programme was a one-off. Kelliher wrote prophetically in his conclusion, “The great privilege, and the still greater responsibility to carry out the wishes of the people, and to bring to full fruition the possibilities and potential effects of this momentous piece of financial legislation [the Reserve Bank Act] rests entirely with the Government. The machinery has been provided, and the future will depend on the full and effective use and wise direction of this machinery in the service of the people.”
The Government reneged on its pledge. Some argue, and it is indeed highly probable, that the supra-national “Money Power” cajoled and threatened Labour’s leading politicians into dropping their programme. Those in the government who argued for its retention were sidelined or driven out. Within a couple of years, the British Empire had launched itself into a horrendous global war, financed by traditional private sector-created debt. New Zealand took the wrong turning at those crossroads, an epochal chance was lost – and the world settled comfortably (for some) back into hands of the blood-sucking money monopolists.
As a footnote, my copy of this little book, signed by HJ Kelliher himself, 27 years before his knighthood, is dedicated to CG Scrimgeour Esq. Colin Graham Scrimgeour, popularly known as “Uncle Scrim”, was a hugely influential personality in New Zealand in the Golden Age of radio broadcasting. Under the guise of religion, “Scrim” broadcast regular weekly programmes during the Depression years giving voice to the concerns of the common people and “pushed the rigorous censorship of broadcasting to the limit”. He was a strong supporter of the Labour Party in the lead up to the 1935 election, and some say, an important contributor to its electoral success.
In spite of that, however, he was not given the commercial licence he was expecting to operate his own radio station. Savage’s Government in fact nationalised broadcasting – before later re-privatising the creation of money. As the Labour Government moved away from its financial reform pledge, Scrim became an increasingly outspoken voice of conscience. After Savage died, he was succeeded by the newly conservativised Peter Fraser, who led New Zealand enthusiastically into the Second World War, and reintroduced military conscription, against all his one-time principles. Fraser did not conceal his hatred for Scrim, had him called up for military service at the age of 40, and dismissed from his position as Controller of the National Commercial [sic] Broadcasting service.
I’m sorry to say, you are unlikely to find a copy of Kelliher’s book. I consider myself inordinately fortunate to have found this one. Call it fate or coincidence. HJK was once upon a time my grandfather-in-law – though I only met him once when he had long-since given up his reforming zeal. I do encourage you, though, to click on this link to Positive Money, and do your best to draw aside the veil of ignorance covering this all-important of subjects. Eighty years on, it’s more important than ever!
Postscript: You may wonder why I’m posting this seemingly irrelevant book review on my blog site about Turkey. It occurred to me that these ideas on financial reform were very prevalent in the 1920s and 30s, around the time Mustafa Kemal Atatürk was trying to build a modern viable republic from the economic and social ruins of the Ottoman Empire. I can’t help wondering if he managed to finance some of his rebuilding projects by intelligent use of the new nation’s credit.
I haven’t yet turned up any corroboratory evidence – but neither have I found any serious discussion of where the money actually did come from. It’s equally true that you will search hard through any histories of New Zealand in those days before you find even the most oblique reference to how Labour financed its state housing project. So I’m not ruling it out.