THE UNMARKED CAUSE OF THE DEPRESSION.

New Zealand Mail, Issue 780, 11 February 1887, Page 9

THE UNMARKED CAUSE OF THE DEPRESSION.

Thß SpECTATOB, NOVEMBER 13TH. j

The Economist of Saturday, November 6th, made a statement which, to most of those who are dwelling on whet is called the. Impression,’mußt have seemed simply amazing, lhis country, which is supposed to be so unproeperone, or even to be,dosing money, has saved and invested within the last leu years at least a thousand million sterling, a third more than the whole National Debt, and probably a much larger sum. It is impossible to fol ow all investments, especially the immense sum annu ally laid out in renewals and improvements, and transmitted abroad for the purchase of foreign'or colonial properties ; but it is cercam that the country lias invested within the ten years the following sums House Property - £ fc6 {so 000 Joint 6 sToclTuompanie's 2 |g’ooo'ooo Colonial Doans ... 80,000,000 Loans to English Local Authorities ... 72,uue,uo

To'al ••• £938,000,000 A thousand millions saved in ten years is, to men who nre not astronomers, a rather bewildering figure, one which the imagination refuse completely to take in ; but the amount when carefully considered, is not so very proa . It is only a hundred millions a year, or a ntth more thau is paid in national taxation,—-pro bablv not two shillings in the pound of national income, end certainly not a fourth of the inoome of those who pay Income-tax. Ine private person who does not save a tenth oi his earnings, does not reckon lumself a saving man • and the nation which desires to grow rich should, by virtue of its persistence in its habits, do better than any indiv.dual. A thousand millions of accumula ad property at 4 per cent yields only forty millions annually, and an addition of forty millions a year to the taxable income of the nation is only an increase of £5 a year per house, or, aay as it has taken ten years to pile up, an jncrenent of 10s per house annually. There is nothing excessive in that, though the figures prove the argument ueed by the Economist, that the country is not growing poorer ; but there is a point in connection with the subject upon which we should like much mors information. How much of this thousand millions has been made by actual productive work done within the decade, and how much has been saved from the income of property p-eviously heaped U p ? "We have an idea that some at least of this mass of investment is the product of sheer hoarding, and that there is a mental process going on in this country which, though perfectly jus 'fiable, and probably beneficial in its ultimate results, not only increases the* depression,’ but as regards certain occupations, may make it unexpectedly continuous protracted decline in the rate of profit, the loss of income from certain kinds of property, especially land and minerals, and the shrinkage in the interest obtainable on good security, have not only limited the means of the investing classes, but has alarmed them aa to their po-itien for the future. They have become more anxious to save, while they have been provided with an ex-use for saving with which the world around them fully sympathises. The srs‘. loss having fallen on the landlords, who are still at the top of En<r’iih society, and they having been driven to 'stop Bpending, all below them have felt justified in stopping expenditure also if they chose Retrenchment has csa-ed to be humiliating, and under the plea that ‘ times are so bad,’ we believe that quiet retrenchment has been carried to a most unusual extent. Town bonnes have been discontinued, visits to town Lave been arranged mo-e cheaply, country establishments have been sharply reduced carriages have beeu laid down, men-servants have been discharged to such an extent, that they reckon themselves among the suffering classes, and the welling-ont of money in needless purchase*, which goes on in such a s’re tm id prosperous times, has been ruthlessly Vopped. No class, for example, not even the coach-builders and booksellers, has suffered more than the second-rate artists, who have, in scores of instances been reduced to such straits that they might fairly join the ranks of the unemployed. They would earn more by wandering up and down, an 1 singing We ve got no work to do,’ than they can earn with either brush or graving tools. The artists are but the front rank in the army of those who minister to the rich ; and this army, with all dependent upon it, has been disrinctly impoverished of late years. The rich who have Buffered much cannot buy as of old, tor want of means ; and the rich who have suffered little will not boy, from alarm, and from an increased desire to make rhemvelves s.»fe, before they allow themselves the luxury of spending. They have lost a little, and expect more loss; they find a rew gratifi ation in investments even for small amounts ; and thousands of rills of money which have fertilised great trades suddenly dry up. Fur-niture-makers, for example, can be delayed a long time if you are only waiting for the depression to end ; but meanwhile, furnishers are living, like beais on their own fat. Wealthy producers and distributors of articles which can be done without have been as. tonished bv a sudden, in some instances a total, cessation of demand, and naturally attribnte to the poverty of their customers what is, in part at least, due to their developed thrift. . ~ , There is, of course, no one to blame for this state of affairs, or, at least, no one in England to whom it is open to dirtribu'e blame We are all of us committed to the praise’ of thrift-. It is perfectly ridiculous for moralists to be incessantly preaching thrift to tbe poor, and then feel irritated if the rich follow their gond advice. Tho e who save, whatever their motives, are only increasing tbe ultimate reservoir of wages, and so protecting the worker* of the future against possible scarcity. When, to take an extreme illustration, a great coal owner shuts his pits, he may throw hundreds out of employ, but he is helping to make-coal, which is an exhaustible article not to be renewed by cultivation, plentiful and cheap for the toilers of the next generation. Expenditure is only beneficial when it is remunerative.