COMING BOOM.

Auckland Star, Volume LXVIII, Issue 160, 8 July 1937, Page 11

COMING BOOM.

DANGERS STRESSED.

METHODS OF CONTROL

PREVENTING SPECULATION

(By Telegraph—Own Correspondent.)

SYDNEY, July 3. Whatever Professor Copland has to *ay about economic conditions is well worth noting, and as he was originally a graduate of Canterbury College his views on such subjects should have a >pecial interest for Xew Zealandere As dean of the faculty of commerce it Melbourne University he has j ust delivered an addrees to the Adelaide Kconomic Society on "The CominjiiKini, <= Like most distinguished economists to-day, Professor Copland anticipates that unless war intervenes, the General tendency toward commercial and induatrisil prosperity now manifesting itself everywhere will culminate shortTy in a f.oeided -boom," followed by its praetirally inevitable sequel, a "commercial eiisis and a period of depression. General Opinion. A* Professor Copland says, the«e him tiers are enjragi ig the attention of (he whole economic world just now, and ii k generally believed by those competent to form an opinion that "lower luxation, increased profits and expenditure on will provide eapitiiliHts anu with such lai"e Mi: pluses that they will take all possibly j.r.ilital.le for investment and -tint a b, jculative, "get-rich-quick" movement which can end only in disneter.

The loading economists of the day hold (hat the most effective ways of securing commercial and financial equilibrium are "the maintenance of cheap money, moderation in the rate of expansion of investment, and the maintenance of full employment at rising standards of living."'

In other words. Governments and banks should provide an adequate supply >if currency and break down any needic-< limitation of credits; banks'should not encourage their clients to embark in purely speculative and relatively unproductive enterprises; and provision -ho'.i'd be made for the expansion of employment at rising rates of wages. Iu general these were the arguments put before the Federal Arbitration I mint recently by Mr. Keddawav, the young research student at Melbourne University. Widely Discussed. These views have been widely discussed during the past few days in Sydney and throughout Australia" and they are largely endorsed by Professor Copland, who like Mr. Redclaway, has been greatly influenced in these matters by the teaching of the eminent British economist J. M. Keynes. It is natural, therefore, that Professor Copland should approve the recent action of the Court in raising the bask; wage as "in line with the general case put forward by economists for controlling expansion eo as to avoid too great an increase in general activity." This simply means that if wages ripe financiers and employers have less surphie to invest in merely speculative ventures-, and thus industry and-com-merce, are stabilised, while at the same time aa the purchasing power of the masses has been increased, all producers will profit by tfye increased demand for goods and thus 'general prosperity will be promoted. Fully Justified. But quite apart from the necessity for taking precautions against a dangerous boom, Professor Copland thinks the increase of wages in Australia just now is. fully justified. The ground is "increased prosperity and the return of the real income per head value to its pre-depression level." - Australia, he says, is now approaching full employment and now that the national income is greater in the aggregate than before the depression and nearly equal to the pre-depression real income per head "there is no sound reason for denying the workers their fair share of these greatly augmented gains." I need not follow Professor Copland in his analysis of the unemployment problem, but the view of wages taken by Mm and Mr. Reddaway, and urged upon by the Arbitration Court with such success, has made many converts here even nrnong those who • wonder whether ''industry can stand it," and the discussion of the problem should interest Professor Copland's many friends and admirers in New Zealand.