The issue is still doubtful as to whether there will be an immediate triumph for Socialism in this country, and we will emerge from the present labour regime as the citizens of a Socialist State. The people have given an unmistakable verdict in favour of Socialism: the reactionary press saw to that, in their repeated tirades identifying Labour policy with Socialism: as if it were not the essential plank in their platform. For the present the people have done all in their power by casting their votes for Labour candidates. But the fight continues in higher circles. The appointment of Sir Harry Batterbee, and Mr. Nash's unceremonious departure are closely related and linked with the decision of the government to reverse its financial policy by issuing the recent 4 [unclear: ½] per cent loan and generally soft-pedalling the more aggressive portions of the programme which has won two elections.

On the Face

On the face of things the government has become timid and reactionary, and the powers of the financier would seem to have won the day: but there are powerful forces at work on the other side. This is indicated by the emergence of a fresh crop of leaders in the Labour party all favouring a socialist policy. Messrs Lee, Lyon and McMillan seem to be the coming men of that party: and the section they represent has apparently shown its strength in the Labour conference, as the famous vote of censure on Mr. Lee was only carried by a slight majority: and it was evidently a trial of strength between the two factions.

But the most important indication of all, is the famous Lee circular which is now admitted to be genuine; it is a document which must have a profound influence upon the history of New Zealand, and as such demands careful study by any citizen who has the welfare of the community at heart. On reading it one is convinced that the basic struggle in this country to-day is between Socialism and Liberalism: and one has the uneasy suspicion that perhaps there is a wider gulf between the points of view and policies of the majority of Cabinet, and the new leaders, than between them and the Opposition.

Descriptive

Briefly, Mr. Savage and Mr. Nash are liberals of the humanitarian type and they wish to better the condition of the workers at the expense of the employers, which they have done as far as is possible within the present capitalist economic framework: but having achieved this commendable object they seem unwilling to proceed further and place the economic power in the hands of the people. Hence the delay in implementing the financial policy which won the last two elections.

It is this delay which Mr. Lee complains of so bitterly in his circular saying that Mr. Nash is always two years in arrear of Labour's programme. He is alarmed at "the present evidence of indecisive vacillation and drift" inside the party, and urges a vigorous prosecution of Labour's financial policy. Mr. Lee, a member of the Labour government and Mr. Nash's financial under secretary, stated bluntly his opinion that Mr. Nash is too inclined to orthodox, i.e. capitalist. Financial methods, and is unfit for his job In the proof of this he brings home to Mr. Nash a formidable array of mistakes in carrying out the Labour policy: but studiously avoids any criticism of Mr. Savage for the obvious reason that the Prime Minister is now at the flood tide of his magnificent popularity and has such personal prestige as to make any attack against him abortive. But that does not make Mr. Savage any less [unclear: Mameworthy]: indeed it would seem that he is abusing his personal power by thwarting the desires of Caucus in retaining Mr. Nash in office as finance minister.

Oh to be in England

The other day a daily paper prophesied a hectic time for Mr. Nash in London: ves the Finance Minister of a Labour government is not likely