THE PRINCIPLES OF ECONOMY.

Hokitika Guardian, 30 August 1926, Page 4

THE PRINCIPLES OF ECONOMY.

"Tiie human mind in our present state of development can no more solve with certainty the problems ol world finance that it can devise a system for

breaking the bank at Monte Curio,’' said Air AVinston Clutrchiil. in an address at a Mansion House banquet. There were, however, some very broad simple truths which gave a sort id rough-and-ready ■ rule-of-thumb guide through all the mysteries and tangles. In fact, the mysteries and tangles seemed to begin only when those very broad simple guides were abandoned. The fundamental principles 'of all finance, public and private, were these: “Cultivate peace and good will". AVork hard. Avoid profusion. Save. Balance your budget and pay your way. Pay your debts. Pay them quickly. .Let your word he your bond. Do a fair day’s work for the money you (jarn, and make sure you are paid m an honest" and stable, currency.” He did not think there was anything else. The infall 1 ibco test whether any principle or method of finance was sound or not. was that 111 finnancc everything that was sound was disagreeable. AVhenever there was any method or expedient in finance which it was easy a n(l pleasant to adopt, they might he quito sure it was unsound. AA'hen they adopted unsound methods of finance they got the pleasure at the time and paid the price afterwards. AA'hen they adopted sound methods of finance they paid the price at the time and got the reward alforwards. Accoidingli, „ good Chancellor of tho Exchequer alway did disagreeable things, and was very likely to be criticised and scolded by ignorant and short-sighted . people. A people had the right to ask its Gov- ! eminent for sound finance and stable currency. They were inter-dependent. Sound finance and stable currency did ‘not benefit the rich alone. On the contrary, it was the poor mail who suffered most when lavish expenditure led to Budget deficits and Budget deficits to borrowing and borrowing to what is called “tho creation of money,” without any corresponding increase in the creation of real goods. It was tho i ieh man who could transfer his wealth most readily into other currencies. It was the poor man whose narrow

margins were soonest pinched by an increased cost of living. Sound finance and stable currency had been the financial policy of Great Britain, whatever party had been in powei, ever since they emerged from the tumult of war. They were determined to persevere in it, and were confident that it wo.uld he for the benefit of all.