MUST SAVE MORE

Otago Daily Times, Issue 23857, 11 July 1939, Page 10

MUST SAVE MORE

DOMINION'S SALVATION REACCUMULATING CAPITAL OVERSEAS WRITER'S VIEWS That New Zealand will have to earn more the better to save is the view expressed by a contributor to the Christian Science Monitor, Boston, writing upon the Dominion under the heading, "This Changing World." •In the absence of a world-wide return to higher prices, he writes, the way to bigger earnings can only come by a further demobilisation of a New Deal which has hoisted the costs of doing business sky high. Only in that way can New Zealand's export industry be levelled down to a competitive position. Only in that way can the good and practicable be preserved out of the progressive experiment. This, the writer considers, is the lesson that is waiting to be learned in New Zealand, as it was learned in France, and as it must be learned in every other country which seeks economic salvation by eating into its capital rather than living on its income.

The writer states that at the 1938 election the road to New Zealanders seemed open to a land flowing with milk and honey. The Savage magic had a very mundane explanation. Mr Savage was fortunate enough to be in office when world prices were on the up and up. But, in addition, capital had been drawn upon out oil reserves built up in London. With this money, on top of the taxes on income, the Government had bought the material necessary for the Savage amenities. This was generally called living off fat, but it was not at first recognised as such in New Zealand, at least at the time of Mr Savage's election. Writing about the exchange control and import restrictions, he states that the step had a significance in that it marked the first breach in the British Commonwealth of libertarianism in international trade. There is only one way to reaccumulate the spent capital, and that it the hard Scottish way. New Zealand must cut down its suit to even smaller dimensions than its cloth, so that the surplus can again be segregated. Foreign trade control will not solve the difficulty.