REMEDY FOR SLUMPS

New Zealand Herald, Volume LXXIV, Issue 22860, 15 October 1937, Page 10

REMEDY FOR SLUMPS

In recent debates spokesmen for the Government have sevierely criticised the measures taken to meet depression conditions between roughly 1930 and 1934. When asked what they would have done, or what they would do should similar circumstances recur, they have taken refuge in vague generalities. The Minister of Finance, replying to the debate on the Land and Income Tax Bill was a little more specific, but no more reassuring than „his colleagues had been. Mr. Nash admitted that if overseas prices for exported produce fell more rapidly and further than the prices for imports, economic disturbance followed, or threatened. That may seem elementary, but it is a proposition to which some of his colleagues have refused to assent. His remedy can fairly be summed up in one sentence he used, "If a fall took place which automatically affected the income of the country the Government would insulate it so far as possible and at the same time set about maintaining the production of everything necessary for an adequate standard of living." This surely has the plain meaning of a policy of economic self-sufficiency to be embarked on by a country of some 1,500,000 people, producing few of the essential raw materials, not very well equipped with plant, and with a working population quite inexperienced in the production of a thousand and one necessary commodities. How would the demand for cotton piece goods, to quote but one instance, be met? The fact is, the way to provide for possible slumps is to be found in. the Biblical example of the seven fat years and the seven lean years. The lesson is to be applied, not literally by storing grain in barns .and storehouses, but by so conserving national resources that there will be a reserve of strength to meet adversity. Instead, the Government is advocating and pursuing a policy of consuming the whole product of the fat years, even to the seed com itself, and ignoring the risk of lean years following. The least reassuring feature of the Minister's statement is that he shows jlio sign of realising that feature of flis Government's policy.