WHY ANOTHER DEPRESSION?

Northern Advocate, 8 December 1936, Page 4

WHY ANOTHER DEPRESSION?

While it is admitted freely throughout New Zealand that the economic situation has improved markedly since this time last year—indeed it would be foolish to say otherwise in the face ol! increased business and industrial activity generally—there is a growing disposition on the part of people whose opinions should be worth something to contend that, the returning prosperity is of hothouse character and cannot continue. Many have apparently convinced themselves that another depression is inevitable, and some have definitely fixed the date. of its arrival as 1939 or 1940. This attitude is not to be commended, for it can serve no good purpose. History has shown that booms and depressions follow one another as the day the night, but, just as means have been found to minimise the effects of the droughts which invariably follow periods of plenty, so it should be possible, -during the economic recovery, of which there is cheering evidence at the moment, to minimise, if not prevent, the oncoming of another slump. The experience of the past depression, which came down like a wolf on the fold, for the great majority of people had lived so long in ease and comfort that they did not imagine any other manner of living was possible, should remind communities and nations of the pits into which they fell and enable them to choose a high and safe road in the future. Any campaign aimed at inducing people to hoard—which is the practice likely to follow a belief that another slump is due in three years—should be discountenanced. It is beyond question that the premature closing of purses contributed very largely to the severity of the slump period through which the world has just passed, and it would be regrettable if such action were repeated. That is not to say that thrift should not be practised during the days of plenty; any other action would be the worst folly, despite what the advocates of prodigal spending may say, for it is only in prosperous times that saving can be practised with safety to any community. Why should another depression he regarded as inevitable? The “Christian Science Monitor,” referring to a “new flowering of business prophecy,” the purpose of which is to convince the people of the United States that another slump is due in 1940 or 1941, says:

“Another depression is not inevitable. We hope that the maladjustments in capitalism can be curbed, and the system progressively stabilised. Already some reforms looking to this end have been made law. Others have been advanced in the course of the Presidential election campaign. Depressions are manmade and men don’t have to make them. While neither business nor government, candidates nor public, have yet come to see the business cycle as an unnecessary phenomenon, requiring integrated correction ' and management by business or government, that perception is dawning.” So far as New Zealand is concerned, its prosperity depends almost solely upon the prosperity of the country which constitutes its chief, if not its only, market, but, at the same time, there is much that the people of the Dominion may do to help themselves and minimise the effects of any interruption of the prosperity of overseas markets. One of the thing’s to which they should set themselves is the maintenance of optimism rather than the encouragement of pessimism. To use a colloquialism, they should “go while the going is good,” and not seek shelter from a storm that need not necessarily come,