INVESTMENT SAVINGS.

Hawke's Bay Tribune, Volume XVII, 26 September 1927, Page 4

INVESTMENT SAVINGS.

gIR GEORGE PAISH, a well known writer on economic sub jects is quoted in one of to-day's cables as complaining that the people of the Old Country are not ‘saving” as much as they should, with the result that there is a shortage o£ the new capital which is needed for industrial expansion. Another well known economist, Sir Leo Uhiozza Money, has re cently (given in a short article which to some extent accounts for the fact that the accumulations oi savings available as fresh capital are relatively less than they were before the war. The gist of his argument lies in the tact that, takien as a whole, the national income is now much more widely distributed. This is the effect mainly of general improvement in the wages rates that now hold as compared with those drawn in pre war days. According to him the nation’s total income m 1911 might be put down at about 1988 million, while in 1924 this figure had risen to 3,803 million, an increase on mere figures of about 90 per cent. But when the respective purchasing value of money during the two years comes to be considered, it is a fair conclusion that the real income—what money buys—was much the same in 1924 as in 1911. As, however, the population had in the meantime increased by about 7 per cent., the real income per head had actually fallen by pi-o bably between 5 and 10 per cent. Yet, despite this decline in real income per head the wage-earners on the average secured some small increase in real earnings. This, of course, means that the well-to-do classes, providing the investors of whom Sir George Paish speaks, now take appreciably less than they did before the war. Beyond this, it is pointed out that, concurrently with this improvement in the general standard of wages earned, enabling an observable improvement in the standard of living, the State by methods of progressive taxation has confiscated a large part of the earnings and incomes of the well-to-do and distributed the results among the people in the shape of pensions, insurance funds and grants of various ' sorts. Taking the year 1925, it is shown that in that year, what with Old Age Pensions, War Pensions, Unemployment Insurance, Health Insurance, Education, Housing, etc., some 338 million was distributed amongst the masses of the people out of funds mainly raised from the well-to-do professional and middle classes. “A wholly destitute family,” writes Sir Leo, “is now almost an impossibility. Thirty years ago an entire family could easily go on the rocks; to-day some amount of income is sure to be coming in, either from earnings or from a pension or an insurance fund. But,” he goes on, “if our aspirations for a still better standard of life are to be realised, it can only be through producing more wealth. The conception that there is an enormous amount of income in the hands of the rich is a dangerous delusion.” It is stated that the entire income of the 25,000 rich British people who have over £5OOO a year is about 350 million, whereas the national bill for beer and whisky, chiefly consumed by the masses of the people, amounts to 315 million. But already the State and local authorities take in taxes and rates about 50 per cent, of the 350 million, leaving only 175 million. If the State were to take this sum also, and divide it up amongst the people, it would give only the very poor dividend of Is. 6d. per week per head. This would not pay one half the cost of the beer and tobacco consumed by the masses of the people.