The Nelson Evening Mail WEDNESDAY, APRIL 29, 1942 THE PRESIDENT HAS A PLAN

Nelson Evening Mail, Volume 77, 29 April 1942, Page 4

The Nelson Evening Mail WEDNESDAY, APRIL 29, 1942 THE PRESIDENT HAS A PLAN

IN in.' seven-point programme lor, stabilising the cost of living in thei United States President Roosevelt does not fall into the error of believing that his or any country can; wage total war yet maintain peace-! time standards. This should be of special interest to us in New Zealand where the expression “standard of living” has become invested with a certain sacredness and where preservation of that standard is to many people the be-all and end-all of existence. Because the major part olj American productive potential isj swinging from peace to a war looting normal life is being disrupted.' i'he President acknowledges this and the American citizen, for the most ! part, accepts the great change. “There must be a drastic reduction j in our standards of living,” says Mr Roosevelt. At the same time he i hopes to mitigate some of the hard-! ships resulting from the inevitable | by employing an improved pattern ; (»l the stabilisation plan used in <he last war. All sorts of devices were worked out | in the various countries during and af- j j ter the Great Wav to try and replace j j peaks and depressions by economic l balance. Most of them failed be-j j cause they were not employed soon | i enough. President Roosevelt aims 1 j to take hold of the cost of living j spiral while it is still controllable.! ! 'top its upward trend and flatten out j j its curves before they begin to loop! i the loop. War spending on the scale! that has now become commonplace always brings the inflation danger, which has to be carefully watched. The United States intends to deal! with it by operating on the component parts of the economic structure: wages, prices, costs, profits. In war there appears to be no escape from this rigid control, and many lessons! learned from past experience should enable it to be more scientifically i applied now. Some of the measures contemplated by the United States are not new to New Zealand. The broad inter,-! lion is to keep the nation’s interna! j structure on an even keel, which of I course is the essence of any stabilising policy. Always the difficulty I lies in curbing the natural inclination of wages, costs and prices to creep up the spiral until they to chase one another in a mad gallop.; resulting in the economic machine Peing thrown out of balance, and, ’!' allowed to develop far enough, in chaos, as experienced in Germany in , ‘he last war. The American ppescrip-l lion is to keep profits reasonably low I by taxing heavily. Remuneration j received by individuals for their

work, as well as returns to land producers for their commodities, are to have a ceiling (upper limit) fixed. To keep the purchasing power of this money more or less constant the complementary step of fixing ceilings for consumer, retail and wholesale prices and for rents in certain areas is proposed. Encouragement of thrift is an important part of the plan. Instead of buying non-essential goods or with their'earnings the people are to be asked to invest them in war bonds or to use them to pay olf old obligations rather than incur fresh ones. Credit and instalment buying are to be discouraged. Finally, every effort is to be made to see that all consumers obmodities irrespective of their ability to pay high prices for them. If this cannot be done except by rationing then rationing will be the method adopted. No plan which sets out lu control a complex and delicate mechanism can be simple in its operation. Neither is it possible to counter all the disruptive influences of war and iron out all the inequalities to achieve complete stabilisation which, in any case, is not the normal condition of a country’s economic structure even in peacetime. President Roosevelt is anxious to avoid riding the crest of the wave at. one period only to be engulfed in its trough at another, and he is wisely setting in motion hi! economic regulator to forestall the persistently-climbing spiral.