"CHEAP MONEY"

Evening Post, Volume CXXXI, Issue 118, 21 May 1941, Page 6

"CHEAP MONEY"

POLICY QUESTIONED

WORKER-CAPITALISTS

SPEND LESS, SAVE

MORE

Investors as a class are accustomed to being stigmatised by certain politicians and their followers as capitalists and therefore public enemies. But the great majority of investors are quiet, well-mean-ing, mild, and mostly wage-earning people who. instead of "wasting their substance in riotous living." put by what they can against the time when their earning capacity fails; and, above all. their object is to become a burden to nobody when their faculties and their physical strength shall shrink with advancing years.

further, they don't wish their defendants, when they themselves shall iie, to be wholly or even partially dependent on anyone at all. Such investors (wisely or otherwise) sometimes apply their savings to fertilis mg industries (to give work to others) or to commercial or financial enterprises; others put them into friendly societies, such societies being among the largest of capitalists investing in safe" ventures; others again favour life assurance, and life assurance organisations are truly colossal investors— of the savings of millions of people of. quite small as well as those of ample means. The United Kingdom Temoerance and General Provident Institution, which has just completed its one hundredth year of business, is an example of capitalism of this kind. It is composed of investors, people of slender means. Its investments run into millions—and its funds are being used in 'winning the war;" Sir Ernest Benn, its president, in a recent ad dress to members, said: "Our business in 1940 has been carried on with a single eye to the winning of the war. Every penny of our surplus, for 1940 has been applied to War Loan, and we have also realised other investments so that in the year £750.000 has been lent to the Government at an unremunerative and artificial rate." SPENDING AND SAVING. As in past years. Sir Ernest Benn again protested against what he described as "the folly and injustice of the 'cheap money' policy. 'Cheap money'^ has achieved none of the purooses in mind when the policy was inaugurated. For instance, it failed altogether to stimulate trade. The injustice of 'cheap money' is seen very clearly by a glance at the war figures. One per cent, added.to the rate of interest on new borrowings would have cost the nation in 1940 something in the neighbourhood of £20.000.000 gross. Since the war more than ten times that sum has been added to our wages bill. Thus the spenders have been encour and the savers discouraged at thf very moment when it is vital that we should all spend less and ''aye more. "1 mention wages only," continued Sir Ernest, "because the figures are available, but nobody doubts that if. in the hurry and excitement of battle, we had been able to pay proper attention to economy, £20.000.000 a year could have been secured out of all the extravagance which surrounds us." He also remarked that as. the savers now outnumber the wage-earners some of the old arguments may need reconsideration Just as it is necessary to make it worth while to work, so it is also necessary to make it worth while to save. An accepted policy which coupled good wages with a more general recognition of the virtue and value of thrift for its own sake would lift us all on to a higher and safer economic level. WAGE CAPITALISTS. "The accumulation of capital by the wage-earners in the last few decades is. perhaps, the best of all the social improvements of our time.'' Sir Ernest observed. "The opportunity now presents itself rapidly to accelerate that healthy process, and by so doing to make both past and present savings safe. In this way the war gives an opportunity for a social revolution second only in importance to the winning of the war itself. Furthermore, if wis. dom and justice are applied to the arrangement of these matters, we can enhance our ability to deal with those economic and employment problems that will arise when the war is won. .

"It was at one time said by some people with derision, by others with pride, that patriotism and 5 per cent, went together Lord Kindersley has shown that patriotism and 2£ per cent, can go a very long way together, or, indeed, that patriotism of itself is in some cases enough for the moment.-

"We have witnessed the most wonderful display of the qualities of the voluntary principle in the National Savings Campaign, it should be noted, however, that the success so far achieved has been based upon patriotism, and that self-interest has been almost left out of account.

"It must remain a matter of conjecture whether, if Lord Kindersley had, as in the last war, been able to offer reasonable investment terms, the results of his campaign might not have been sufficient to close completely the dangerous gap between revenue and spending, and to rid us safely of the horrid bogy of inflation."