THE KEYNES PLAN

Evening Post, Volume CXV, Issue 111, 13 May 1933, Page 11

THE KEYNES PLAN

L TO REGAIN PROSPERITY

AN INTERNATIONAL FUND

DETAILED PROPOSALS

Will a more responsivo oar be turned to the advice that is being publicly offered by the economists? . Tor once they are practically all of one mind in demanding that fundamental changes be made in economic policy, -with a view to achieving that raising of price levels which is the declared object not only of his Majesty's Government in the United Kingdom, but of all of the Dominion Governments which were represented at last year's Ottawa Conference, A timely presentation of the view, which he shares with some of the leading economists, is put forward in a pamphlet published by Mr. J. Maynard Keynos, who advances a bold and ambitious programme, which he claims should not be refused if it cannot be refuted, says the London correspondent of the Melbourne "Ago." It is a twofold plan. On its domestic side it recommends a great increase in •'loan expenditure," and in the international sphere he advocates a policy of controlled international reflation, to be pressed before the World Economic Conference. The second part of his proposals is already attracting the notice of thoso in England and abroad who are engaged in preparations for the great .Conference which is to take place in the summer. The resumption of international lending is to be fostered by the creation of an international authority to issue certificates, to be treated as the equivalent of gold, of a total value of. £5,000,000,000, to be distributed among the participating nations. They would l add to each country's'current resources and relieve ' Budget deficits or taxation; they would strengthen the reserves. of exchange restrictions, and enable those restrictions to be removed; they would stimulate public expenditure,'and, by thus providing both the supply of new money and the demand, they would increase the general level of prices. They would, finally, ~be gradually retired when prices had reached a predetermined level. DOMESTIC SIDE. Both parts of this programme are inspired by the same principle of superseding contraction by expansion, but it is the domestic proposals which, with the Budget in immediate prospect, have attracted more immediate attention. In a closelyj-reaspned argument,^ Mr. Keynes gives figures to support his contention that the cost of such a palicy at home would be completely ,i outweighed by the savings effected. "Too good to be true" is the immediate verdict of the cautious. Others who are always suspicious of the theorists are content to declare* that academic economists are as often wrong as right. But are they? At all events, Mr. Keynes has a pretty good record in this respectl In 1919 he offered to the public his "Economic Consequences of the Peace," which, as ©vents have shown, was one of the most accurate works of prophecy ever committed to .paper. Everybody now knows the economic absurdity of the Allied ■ reparation policy, but Mr. Keynes knew it in 1919, and had the courage to say so. He was equally alive to futility of certain articles of the. peace treaties, the need for the revision of which is now becoming recognised by statesmen .all over Europe. His "Essays in Perr suasianji'^- published-' in" 1931) v brought, together a collection of his prophetic writings, since the war—'.'the croakings of a Cassandra who could never, influence the course of events in time." But all of them have- been justified by experience In 1925 he was equally right in resisting, unsuccessfully, the precipitate return to the gold standard. And in 1928 he was three years ahead of his time in recognising that France had avoided the sacrifices of deflation without loss of reputation. - TREATED SERIOUSLY. His latest pamphlet, "The Means to Prosperity," cannot therefor* be lightly dismissed. It must be, and is being, taken seriously as a most valuable con- • tributiou to an urgent and pressing problem. It has already secured powerful backing in the Press. It has aroused the keenest interest in Parliament, and Mr. Keynes has already privately addressed At the present juncture the general vitiation of all administration in India has resulted in outbreaks in certain States of overwrought subjects. It will be imagined that in this connection alone, therefore, the Viceroy's responsibilities are onerous. In the more purely foreign sphere he has to watch the local relations with France, China, Afghanistan, and Persia, all of whom inarch with India, while even Soviet Eussia is not far removed. VARIED ACTIVITIES. The week's work, therefore, will involve several Cabinet meetings, at which the Viceroy is in the position of the British Premier. Every day the secretaries in each of the Departments bring to his Excellency the papers from the Cabinet Minister (termed Member of Council), and all matters that the Viceroy should know, but which are not sufficiently important to be "Council" (i.e., Cabinet cases); are thus dealt with. . These ,alone make a full day's activities, but there are numerous 'cases ■which the Viceroy must be read in -which several high authorities have tendered opinion and advice, and on which a decision must be reached. "As a variant from this daily pressing work of governing a country as large and as populous as Europe without Jtussia, there are innumerable interviews. Some are interviews of ceremony; visits from the various Princes visiting the capital, others are to important visitors 'from Europe or other countries, politicians, section leaders, and others from all over India. Many of the Princes are of sufficient importance and status to have their visits returned with ceremony. The Princes come with retainers and retinues, in silver cars and the like, and his Excellency makes his return in similar tenue with an escort of his Life . Guards, the famous Bodyguard Lancers, a-corps -v^hich in days gone by went into the field on many occasions. * On the social side, the' Viceroy's duties are equally onerous. No big function at the capital can occur without his much sought-after presence, officially or privately. The Viceroys entertain generously and lavishly, at State balls, smaller dances, many large dinner parties, at which European and Indian are most happily mingled. The routine at the Viceroy's house, for reasons of State, resembles that of Buckingham Palace. Some years ago tho wife of the then Governor-General of tho Philippines, who was visiting Simla, was a guest at a big Viceregal dinner party. She remarked to her dinner partner, "There's a lot of curemonny here." It was explained to her that in India Ruling Princes kept great State, and that the Viceroy could not well dispense with such things, and, indeed, was expected even to transcend. "Ah," said the perspicacious lady, "I see ... a little more dawg!" which exactly summed up the position. For the Viceroy heads a very great continent, with a magnificent facade. "Oh, gallant \ras our galley, with its head : of burnished gold." : When the new Constitution comes, "if it is .possible to hammer out- a Consti-

tution for a continent, or a triple Mussolini for Premier, the governing duties of the Governor-General will be slightly relieved. Only slightly, since already he has the great constitutional machine .at- work, with his Ministers and whatnots. Under him must stity come the reserved subjects, the subjects which defend the polyglot continent, and conduct its highor finance, its British capital, without which India could not have seen thousands of miles of rail and literally millions of miles of canal and irrigation channels. Foreign relations will need his daily caro, as will the major problems of the European service, without which steel frame the great continent, despite tho energies .of its sons, cannot function or stand on its foundation. jiNo Viceroy who knows expects much relief from any new Constitution. Nay, in his heart of hearts, he knows well that a new crop of unknown troubles lies ahead. Tho day's work/ in India, and all Indian institutions, have a tendency to go topsy-turvy, too, if you take your eye off them. To none was this more evident than to the last of the Moguls, to the great, the mighty Aurungzebej who saw the great Empire going upside down, and after whose death came that breaking- of the fabric' into the thousand pieces which the British have put together. . So we may be sure that the great representative of tho Crown in India will never have less than thirty hours' work to do in every twenty-four hour day in governing, in leading, in entertaining, and generally setting the tone and stirring the imagination of the Eastern con-, tinent that fate has brought to the British Commonwealth.