NOTES OF THE DAY

Dominion, Volume 26, Issue 219, 12 June 1933, Page 8

NOTES OF THE DAY

“Economic treason” is the new name given by the German Government to the act of. withdrawing capital from the country. The effect is to make a crime of what is already a forbidden offence in many financially embarrassed countries in Europe and outside it. There should be nothing illogical in a State constraining money to remain at its service. The trouble is that in practice it never seems possible to draw the net close enough or else,'to judge by the phrase “flight of capital,” money can take wings over the'highest barrier. Thus the result is often the reverse of that intended. While capital stilt flies out, none returns to nest in the country concerned. But the invention of “economic treason” does serve to emphasise the rapid growth of the pretensions of the State and also the age of economic war in which we live.

Victoria this winter is to experiment with a new system of unemployment relief through which it is. hoped to abolish many of the defects of the dole system, and provide a more satisfactory basis for self-respecting workmen. Of 18,340 men at present receiving the dole for themselves and their families, only 6782 are working for their sustenance. “It is clear,” says the Melbourne Argus in comment, “that the dole system has failed, but it is not apparent what steps are proposed to discipline those men who, though well able to do relief work, may prefer to remain in idleness and accept the lower sustenance rate rather than work for a larger amount.” .The Argus here raises a real difficulty. It has been shown by experience in Britain that in a large number of cases it has been difficult to induce men who have grown accustomed to live in idleness on a pittance to go back to work at all. Their morale has been sapped, and their fibre deteriorated by a long period of complete idleness. That is the most serious aspect of the dole system, and from the social point of view, one of the strongest arguments against it.

Little notice seems to be taken in New Zealand of the rapid depreciation of the dollar. Two months ago an English pound would change into only 3 dollars 41 cents; to-day it is worth 4 dollars 11 cents. Between April and June the slide has been 70 cents. Another 70 cents and the dollar will be almost back to par with the pound sterling. New Zealand had an instance of what that signified in a practical way by the reduction of the local price of petrol. No doubt the effect will make itself felt over the whole range of American exports. Prices in American currency became prohibitive as the dollar rose in relation to the pound; now the process is being reversed. What the end of these changing valuations of currencies is to be cannot be predicted. They have introduced a devastating factor of uncertainty into all trade and industry. Part of Japan’s recent rapid advance in world markets is explained by the heavy depreciation of the yen. Currency stabilisation at an agreed scale of values will be one of the main problems at the World Economic Conference, one that must be solved if anything real is to be accomplished in other directions.