THE SECOND BOUNCE

Evening Post, Volume CXXVII, Issue 60, 13 March 1939, Page 8

THE SECOND BOUNCE

People have not forgotten Mr. Savage's famous reference to "bouncing the ball" with London financiers. When the Government was challenged on this statement it promptly and unequivocally declared its adherence to orthodox courses, and disclaimed any thought of repudiation. The second bounce of the ball suggested that when the ball struck solid earth it had been suddenly deflated. Something similar seems to have occurred to Mr. Savage's recent declaration for a change in the monetary system. Challenged by the Leader of the Opposition, the Prime Minister now says: "People can only increase their standard of life by producing the things that go to make the standard in greater quantities. All that I am asking is that those increases should also be reflected in the incomes of the people." If the word "incomes" is defined as real wages —the ability to buy goods and services and not merely a greater sum in currency—this is just the process that has been in operation for the last half-century. The standard of life has been raised by greater production and the effect of that greater production is seen in the power of the people to buy and use goods and

services. But the Prime Minister's original statement implied more than a continuation of this process, and definite harm is done by such statements unless they are clear and definite, which Mr. Savage's was nor. The money system may not be all that could be desired, but it does inspire a certain confidence. A suggestion of change may mean anything, even to inflation that destroys the value of • savings. Unless the Prime Minister has a clear and safe plan of change in mind—and he has not yet disclosed it —it is much better not to talk about it.