OUR SPENDING POWER

New Zealand Herald, Volume LXXVI, Issue 23259, 31 January 1939, Page 13

OUR SPENDING POWER

Sir, —I do not think Mr. Peter Mellor is so confused in mind that he is unable to understand this matter. Savings are derived from income. Where else could they come from? But the savings of past years were included in the income of the years in -which thev were earned and they cannot b© counted as income again when they come to be spent. If a family, during the present year, spends the whole of its earnings for this year and also spends the savings of past years then it is, during this year, living beyond its income and Mr. Mellor knows it perfectly well. That is precisely what we are doing as a community. Mr. Nash himself has shown that last year we purchased imports of the value of over £-8,000,000 with the savings of previous years. Thoso goods have been consumed and that consumption was entirely additional to the consumption that was made possible by our output for the year. Can Mr. Mellor deny it? Mr. Mellor is in confusion of mind in regard to saving. The building up of deposits does not mean that the income of the community is not being fully used. Scarcely any error could bo more sillv or mischievous. Does Mr. Mellor suppose that the £76,000,000 deposited in our savings banks and the 1'62,000,000 deposited in the trading banks are all piled up in idleness in those banks? Every year our output is consumed, practically in entirety, and Mr. Mellor cannot show otherwise. In recent years we have also consumed a vast volume of goods purchased with the savings of previous years and that wasting process lias come to an end. if Mr. Savage has stated that we must, as a community, do more 'irork per liead if we are to continue the consumption of recent years he must, I think, have made the statement exclusively to Mr. Mellor. Personally I have seen not the least hint of anything of the kind. That we have had a fine flow of words about maintaining our standards of living is, of course, known to all of us. J. Johnstone. Manurewa.