CORRESPONDENCE

Evening Post, Volume CXXV, Issue 100, 30 April 1938, Page 8

CORRESPONDENCE

GOODS AND1 DEMAND

(To the Editor.!

Sir, —Your correspondent "Thomas," who fears that he has fallen into the category of those with the meanest intelligence, need not drag thousands of people with him—it might not be true. When he says, "It appears that prosperity according to 'Demos' and Mr. Savaga can. be regulated by production" he must be thanked for placing me in good company, but I ask him how prosperous he would be if production stopped. He would soon find himself starving, naked, and cold in a darkened world. All the money he possessed would be of no avail. Despite the amazing increase in production the people during the depression were denied the partaking of it by the shortage of purchasing power. There was no lack of coal, iron, chemicals, butter, cheese, wool, beef, or mutton, but money, and therein lies the folly and tragedy of the thing. "Thomas" is curious to know .the value of a million boxes of butter and a million bales of wool if their market price fell below the. cost of production. The answer is that purchasing power makes • the market; the butter and wool' have always the same value as food and clothing. Having the money to buy them creates the demandT The production of goods, doubled during the depression, was dumped on a slump-ridden, povertystricken England, and was the best reason for a world-wide increase in purchasing power that could be shown.

"Thomas" is not unintelligent when he states that if Germany begins to use synthetic wool other countries will do the same. Yes, that, occurred with silk, and I think the world as a whole enjoys the cheapness and quality of the artificial product. If Germany and other countries do not take our wool we cannot take their own production, and we will simply have to make our own goods here. The inauguration ,of the steel industry here might thus be termed a good start, for steel is already difficult to. obtain, but there is no reason for "Thomas" to be alarmed that the steel industry will cause any more loss to the taxpayers here than it does in England, where it is in full swing. If England, because of the steel industry here, refused to take our produce she could neither sell us her goods nor expect us to pay her our debts,, which are paid in goods. Credits are established in England by the sale of our goods, and are only absorbed by our ability' to buy the English goods ia this, our own country. Money gives us that power, but the goods are the wealth, and I endeavoured in my letter to the Editor to dispel his fears that either the goods or the money need ever be in short supply in this land of increasing abundance. —I am, etc., • DEMOS.