“THE INEVITABLE DEPRESSION”

Otago Daily Times, Issue 23393, 7 January 1938, Page 5

“THE INEVITABLE DEPRESSION”

TO THE EDITOR

Sir, —In your issue of December 16 last appears the following from Rugby dated December 14: — Sir Thomas Inksip, Minister for the Co-ordination of Defence, speaking in London on the rearmament programme, said the defence expenditure in 1913 was £77,000,000. In 1934 it was £113,000,000, and in 1937 £278.000,000. In 1938-39 between £320,000.000 and £340,000,000 would be spent. The Government depended on the ingenuity and skill of the manufacturers for assistance. If it had not been for the highest state of willingness on the part of the, manufacturers the Government could not even have done one-tenth of what had been done —even if it had nationalised the industry. Rearmament had not yet reached anything like its full momentum, which it might attain in about 18 months. There were in various parts of the country new factories which were as yet only In their early stages of preparation, and at which hundreds of thousands of men, and possibly women, would be employed. The industrial strength of the country was greater to-day by means of the rearmament programme. Britain had trained a new army of competent work people. Sir Thomas Insklp said he had unfailing optimism regarding the British race and the capacity of the Government to guide Its policy so that the great disaster of war should be avoided.

Later Sir Thomas said: “ There is no reason for the slightest fear of a depression—the rearmament programme will not slow down for four or five years.” In the same column the Prime Minister, Mr Neville Chamberlain, is reported to have alluded to the talk of a slump as exaggerated and dangerous, and as going on to say that Britain is in a far better position to withstand a depression than previously. So, Sir Thomas has let the cat out of the bag properly. It is the rearmament programme, and that alone, that is to keep the slump away. And, of course, we must believe Sir Thomas. If Major Douglas ' said the same we must not believe him. And yet Major Douglas and Sir Thomas would be in complete agreement concerning the efficacy of the rearmament programme to keep the depression away, at least, temporarily. I have no doubt, however, that Major Douglas would point out that the same rearmament expenditure —financed as it is—would accentuate the depression when it inevitably comes and in doing so would certainly put Mr Chamberlain ■ at fault. For how can Britain be in a better position to withstand a slump when the greater part of the huge cost of rearmament must be tucked on to the National Debt? It is obvious to any student of economics that .the rearmament programme is giving a great boost to industry in general in Britain to-day. When hundreds of thousands of workers are, as Sir Thomas Inskip say£, drawing good wages for making things that they or their fellow men have not got to buy, it stands to reason that the financial demand for goods made by other industries is very keen. But when these countless workers are thrown out of work, as they inevitably must be in a few short years’ time, and the terrible harvest of added debt has got to be garnered, what then? But “ on with the dance ” say Sir Thomas and Mr Neville Chamberlain. "Any talk of a slump is exaggerated and dangerous.” Surely now is the time. to talk about it before the debacle takes place. Surely people would be wise to consider where the old financial bondage is leading them. Surely it cannot be argued that a financial system which demands the manufacture of millions of pounds’ worth of armaments or other possibly useless junk to keep it on its feet is sound in any way! Surely it is time our leaders in the Motherland resolved to take stock of the actual position. Are our noted soothsayers true- friends or foes? —I am. etc., Jumbo. Ngapara.