BRITAIN NOT INFLATING CURRENCY

Nelson Evening Mail, Volume 77, 18 February 1942, Page 5

BRITAIN NOT INFLATING CURRENCY

WHITE PAPER ON NATIONAL INCOME AIM OF FINANCIAL POLICY Striking figures in a British White i Paper entitled “Analysis of Sources of ! War Finance and Estimate of National Income and Expenditure in 1938 and | 1940” illustrate the aims and motives cf the British Government's financial policy and its tendency towards antiinflationary measures. states "The Chartered Accountant in Australia.” During the period covered by the White Paper, the national income, calculated within the strictest definition i cl the term, rose from £4,415 millions !to £5,585 millions. The proportion j It om wages rose from 41 per cent, in j 1938 to 44 per cent, in 1940: the proportion of salaries and rents each fell by j il per cent.: and the income from pro- ; fits and interests remained constant at j 27 oer cent. The "spendable” portion of the naj tional income rose from £4,148 milI lions to £4.911 millions, and the manner in which this expenditure was ! made reveals some very interesting I trends. SAVINGS INCREASE The most significant is the increase ;in gioss personal savings from £lsl millions to £6OB millions—an increase of 300 per cent. Out of increased expenditure of £760 millions, £457 mil--1 ons, or 60 per cent, were provided from savings without the creation of j additional purchasing power. This shows clearly that British finance is not heading towards inflation. Expenditure on food, drink, and tobacco from £1,648 millions to £1,973 millions, but this was due to increased prices and not increased production. Rents, rates, fuel, light, household goods and domestic service cost £959 millions in 1938, and £991 millions in 1940. Expenditure and clothing and laundry increased from £469 millions to £512 millions but expenditure on private motor vehicles dropped sharply from £llß millions to £SO millions. Comparative figures for other expenditure are as follows (the 1940 figure in brackets and amount shown in million pounds):— Travel other than in private vehicles 169 (164). Other goods and services 634 (608). COMMODITY STOCKS SATISFACTORY Wholesale prices rose by 10 per cent, from February, 1940. to February. 1941, but retail sales (in values) show an increase of only 2.9 per cent. This is because, while sales of foodstuffs and perishables increased by 3.9 per cent., sales of all other goods increased by only 1.8 per cent. Stocks of all classes of commodities are still exceedingly satisfactory. Cal- 4 culated on values, stocks during Feb-‘ ruary were 15.3 per cent, higher than ii. the previous year, which, making allowance for a 10 per cent, rise in prices, indicates that the actual quantity of stocks must be at least as great as last year. Stocks of perishable foodstuffs were 16.3 per cent, higher in February. 1941, than a year before. Household goods increased by 37.5 per cent, in value but i clothing stocks only rose 12 per cent, and luxury goods 1.6 per cent., rej presenting an actual fall in quantities , I available.