THE H.B. TRIBUNE SATURDAY, MAY 2, 1925. MR. CHURCHILL’S BUDGET.

Hawke's Bay Tribune, Volume XV, Issue 125, 2 May 1925, Page 4

THE H.B. TRIBUNE SATURDAY, MAY 2, 1925. MR. CHURCHILL’S BUDGET.

When Mr. Winston Churchill joined up definitely with the Conservative Party in the Old Country there were grave misgivings in the minds of many as to whether he was an altogether desirable convert. These were in no way allayed when, after the election last November, Mr. Baldwin took him into tho Ministry and entrusted to him the most important office of Chancellor of the Exchequer. This brilliant but erratic politician had more than onye proved himself to be almost more dangerous as a colleague than as an opponent, and it was feared that his inclusion in the Cabinet might easily result in his affording further evidence of this. These anxieties have not been long in finding justification. Just at a time when his leader has been doing his best, and with some show of success, to conciliate the Labour Party and secure its co-operation in his schemes for the betterment of the workers Mr. Churchill has broken bounds. He has evidently found himself unable to resist the temptation once more to indulge himself in that caustic speech of which he is an undoubted master, but which, while entertaining enough in mere politician, is but rarely a safe recourse for the serious statesman. More particularly was it to be avoided at a time of tension such as ■ the present, when Labour members’ sensibilities are raw with comparatively recent defeat, and the class they more specially represent is undoubtedly suffering acutely from the industrial depression that prevails. Whatever of truth may have underlain Mr. Churchill’s words—and it should bo noted that they were addressed to employers as well as to trade unionists—it would most assuredly have been better had they not been uttered as and when they were. Whatever other consequences Mr. Churchill’s unfortunate comment on criticisms of his Budget may bring about, it is easy to see that it will result in further debate on economic questions of profound importance being tainted with an acrimony that may foil all Mr. Baldwin’s sincerely good intentions. Of the subjects under discussion the proposed return to the gold standard is evidently deemed one of much greater importance than the average man considers it. No doubt there is some justification of this view, as the movement is one that may affect the worldwide financial and trading operations of the country, which, in turn, reflect upon the conduct of its Industrie . Sir Frederick Wise, who is quoted in to-day’s cables, as among those roundlv condemning it,

is by no means alone in his views, more particularly with regard to American influences. A message recently received by a Sydney paper quotes Mr. Benjamin H. Morgan, chairman of the British Empire Producers’ Organisation, and a vicechairman of the Trade and Industry Committee of the Colonial Institute, as expressing like opinions. “The finance market is to-day,” said Mr. Morgan, “more dominated by Americap and Continental financiers than it was before the war. Therefore, the present craze for a return to the gold standard is perilous, and if adopted would make the Empire an economic vassal of the United States.” He declared that, while the movement was supported by financial circles, it by no means commended itself to either manufacturers, merchants or agriculturists. He further claimed that the four years of trade depression which Britain had experienced was a sequel to the adoption of the Cunliffe Currency Committee’s suggestion to reduce currency, thus, as he puts it, destroying nearly half of the people’s purchasing power. The position, on this line of reasoning, would only be accentuated if “Treasury notes were destroyed by supplying a limited quantity of golden sovereigns. The result of that would be further reductions in bank overdrafts, bringing down the supply of credit in proportion to the reduction in the volume of legal tender, and this would mean a further reduction in the demand for goods, and in increased unemployment, and additional taxation burdens.” Possibly this view of the effect on internal trade would be modified by the consideration that the qualified return to gold proposed by Mr. Churchill does not involve the hasty withdrawal of paper currency or making its redemption in gold compulsory on the banks. Mr. Morgan goes on to discuss the effect upon the National Debt, which he asserts has been practically doubled by the efforts at deflation increasing the value of the pound sterling to much beyond that which it had when the war debt was incurred. This, of course, is a point, and one of outstanding importance, that has often been argued with various conclusion. While the man in the street may be able to understand the contentions on this side and on that, it is something beyond him to size up the cumulative consequences of the various reactions that may result from following either one course or the other. These must be left to the expert economists, and they seems to be as yet a long way from reaching the point of general agreement.