"STATE IN BUSINESS"

Evening Post, Volume CXXIII, Issue 113, 14 May 1937, Page 8

"STATE IN BUSINESS"

As the third decade of this century was drawing to its close, much was heard of "less Government in. business." Today, that slogan seems to have been overwhelmed with every kind of adverse circumstance. In the first place, the "depression" (1930-35) amounted almost to a revolution, and drove all kinds of economic problems into the Legislatures, from -which have issued, as a consequence, all kinds of uneconomic remedy. How could the United States banks remain ruggedly individualistic when they were paralysed? Even in countries where the banks did not close, and where bank-strength was the only stable economic factor in the "depression," the sufferings of.the public yet led in 1931-36 to "interference" legislation that would have seemed impossible in 1928. What economic demoralisation failed to accomplish in this direction has been done in a very effective manner by war-scare. Since the two mid-European dictators showed their hand, national defence has joined forces with economic discontent in pushing Governments into all kinds of artificialised industrial endeavour. Take for example the defencedemand for locally, produced oil.

Australia, like New Zealand, has courted the farmer by passing special legislation ior artificially aiding exports; but, so far, New Zealand has not followed Australia in State aid for oil. Yet the course of Australian thinking on that special subject is worthy of study. After a great soul-searching the Commonwealth Government has been daunted by the uneconomic aspect of extracting oil from coal (either by hydrogenation or by carbonisation) and has agreed to help the oil shale industry, but, it seems, with a reservation, in that exemption from excise duty will apply only to the first ten million gallons in any year. /The agreement therefore bears the complexion of a political need for ten million gallons of.local oil per annum, paid for up to that figure, rather than of an economic case for the production of oil from Australian coal or Australian shales. What industrial arguments could not do for Newnes shales in the third decade of the century can be done in the fourth decade, when economic principles are being tossed about on the cross-waves of "depression" economics and fear of war. These constitute a peculiar alliance. Fascist threats in Europe have nothing in common with socialistic democratic trends—and Signor Mussolini is no colleague of Labour parties—yet the combined result is more "Government in business" than ever before.