CLOAKED TRUTH

Dominion, Volume 31, Issue 115, 9 February 1938, Page 10

CLOAKED TRUTH

Although Sir Josiah Stamp in an interview published yesterday was disinclined, without fuller knowledge of the subject, to express an opinion on the New Zealand Labour Government’s policy and legislation it was plain from his remarks that he . regarded them with a somewhat doubtful eye. This distinguished economist did not say whether our “legislative experiments were open to criticism or condemnation. He simply remarked that the test of their soundness and efficacy would come when prices fell, and a falling market was an eventuality which must be expected. “One can always cloak truth for a long while on, a rising market,” he said. Here the speaker placed his finger on tne danger of our present situation. The Government has been pursuing a policy of high wages and shorter hours in the manifest expectation that the period of high prices would continue indefinitely. Phis has added enormously to all costs. It will be difficult, as Sir Josiah Stamp warns us, to reduce these costs when prices fall. We know that from past experience. With costs arbitrarily fixed the effect of a fall in prices. is that the economic machinery becomes jammed. During the depression industry had to be unshackled from the restrictions of award conditions before it could recover. But the restrictions which then existed were far less onerous than those imposed by . the Socialist Government. These have sent costs soaring upward, prices rocketing, and reduced the purchasing power of wages. What is going to happen when overseas prices, the source of our national income, fall again? Take the case of the wool sales. In the 1936-37 season the realisations for the first six sales totalled in round figures some £3% millions. For the corresponding number of sales of the present season the total is fl| millions, a drop of a million and a half. This reminder of the fluctuating nature of our national income should warn the Government of the unwisdom of spending up to the limit. There is no indication that it is making any provision against a fall, yet this is precisely the time, when such provision should be made. The danger of the course it is pursuing will be demonstrated should the need for the adjustment of expenditure, and a modification of industrial restrictions arise. Ihe truth will then stand revealed. At present the errors of legislation and the fallacies of Socialist, experiments are being cloaked by conditions of prosperity due to good prices overseas.