HEALTH OF WAR ECONOMY

Dominion, Volume 35, Issue 8, 4 October 1941, Page 9

HEALTH OF WAR ECONOMY

Checking Inflation LATER BRITISH MOVE POSSIBLE (British Official Wireless.) (Received October 3, 7 p.m.) RUGBY', October 2. The statement of the Chancellor of the Exchequer in the House of Commons on war finance is regarded by newspapers as being an account of a satisfactory state of affairs, and particular attention is paid to the fact that Sir Kingsley Wood was able to say that the financing of the war so far has been carried out by methods which are keeping inflation in check. “The Times” says that such an account is strictly accurate, and it continues : “There has been a degree of inflation in the sense of the rise ot internal prices and of the decline in the purchasing power of sterling in the free foreign markets, but there has been no uncontrollable upward rush of prices and no impairment of our power to obtain what we require from abroad. The indispensible help which the LeaseLend Act has given us in this matter must here be gratefully acknowledged. That Act is, however, only one of the measures which have enabled us so far to hold the financial front. “The methods to which the Chancellor referred are vigorous taxation, vigorous saving, and a fairly extensive system of price-fixing and rationing. These measures, taken together, have diverted expenditure of the growing national income from directions in which spending might have caused financial and economic chaos.” Wage and Price Control. After referring to the Chancellor’s statement that taxation has practically reached the limit in the higher regions of incomes, "The Times” proceeds to consider the question of the limitation of wages and salaries or, alternatively, of indirectly bringing about this result by a further extension of price-fix-ing and rationing. Stressing the Chancellor’s statement that the danger of inflation has not passed, it states: “The Government must be ready and prompt to apply one or the other whenever the danger becomes more imminent. It may well be found that a mixture of the two —namely, control of wages and salaries and an extension of price-fix-ing and rationing—will be required. “It would be foolish to suppose that we are yet bearing the heaviest burdens which the war will 'impose. But whatever measures prove necessary they will be cheerfully supported, provided that the public does not see or suspect widespread waste.”