LENDER AND WORKER

Hawera Star, Volume LI, 4 May 1931, Page 7

LENDER AND WORKER

INFLATION HITS BOTH. TEST OF FRENCH WAGES. Is it not a striking fact that the gospe lof inflation is being heard m Australia and not at a/ll in those countries of Europe that have tried it r This point is raised by the Canterbury College Department of Economics in its periodical bulletin issued through the Canterbury Chamber of Commerce. “Europe is facing difficulties greater than those of New Zealand,” says the bulletin, “but Europe has had intimate practical experience. of inflation during the recent past, and she has learned, out of her bitter experience, that inflation is a disease worse than anything it may be required to cure. In explaining that in certain cases the producer in inflated France made temporary gain, at the expense of the lender and also of the labourer, the bulletin says: “The producer gamed, first by having all his borrowed capital written down to about one-third of its cost; second, by the possession of modernised equipment bought with loan money partially repudiated; third, by the payment of real wages appreciably lower than those ruling among his foreign competitors. About 1925 real wages in’ France were estimated at about 33 per cent, lower than in England, and i this relatively low level of wages is an important cause of the apparent prosperity and compartive absence of 'unemployment in Franco during recent years.” . , ‘ In short, French inflation wrote ofl two-thirds of debts, and not less than one-third of wages.