The Evening Star THURSDAY, AUGUST 3, 1939. “TOO FAR AND TOO FAST.”

Evening Star, Issue 23335, 3 August 1939, Page 10

The Evening Star THURSDAY, AUGUST 3, 1939. “TOO FAR AND TOO FAST.”

It is natural that a flood of criticism should have followed the release of New Zealand’s 1939 Budget. This document reveals in a most unpleasant way the effects of the Government’s determination that the country should spend its way to prosperity. It did not seem to occur to a majority of the electors that this was a contradiction of terms —a reversal of the doctrines propounded down the centuries by philosophers, economists, and students of social welfare. Charles Dickens summarised the impracticability of such a theory through the mouth of one of his most famous characters, and what applies to the individual affects a State in the same way. Dealing- with the Dominion’s financial position as revealed in the Budget, two illuminating addresses were given in this city last night at the annual meeting of the Chamber of Commerce. The speakers were Mr Downio Stewart and Mr P. 0. Smellie, the retiring president of the chamber, and what they have said should receive the serious consideration of everyone who really desires to understand the position in which this country now stands. The sum of Mr Smellie’s arguments, which are free from any political implications, and which are set forth with great clarity, is that we have gone top far and too fast in building up a standard

which the country cannot sustain, and that there must be some retracing of our steps if we are to escape disaster. In the light of recent events, and remembering Mr Nash’s long and difficult task in London, which brought some temporary relief to New Zealand, there is no escaping the conclusion that the present furious rate of spending, so much of it going to uneconomic works, must be slowed up if we are to overcome the financial difficulties with which the country is now faced. Mr Smellio has done good service in setting forth the principles that are necessary for economic prosperity in a country.

Mr Downie Stewart’s remarks were a corrective to the loose ideas that are so constantly expressed about the place of money in our economic system. As a former Minister of Finance, who on various occasions, and in one instance in particular, convincingly demonstrated his independence of mind, ho is entitled to be listened to with respect. The speaker paid a tribute to our muchabused banking institutions. This is only just, for while the banks trade for profit for their shareholders, they at the same time render invaluable service to tho country in adjusting the intricate and delicate financial and trading relations at home, and abroad. The weakness of the present Government’s theory that if plenty of purchasing power is available prosperity for all will follow was exposed, one illustration being that unless increased wages are sustained by production th§y soon disappear in the spiral of rising prices. Ministers are beginning to realise the truth of that saying. Mr Savage and his colleagues have of late repeatedly stressed the need of increased production. The unfortunate thing is that in their administration they have adopted courses that act in the opposite way. No Government ever took office in such favourable circumstances as the one now in power. None ever threw away its opportunities in such a reckless manner. This was due, no doubt, to a sincere desire to raise the standard of life in this country. In their inexperience Ministers have gone too far and too fast, and the future is anything but encouraging. In Mr Steiyart’s opinion it will not he long before the Aiinister of Finance has to make another hasty pilgrimage to London imploring help from those whose advice wo ignore.