SHADOW AND SUBSTANCE

Otago Daily Times, Issue 23955, 2 November 1939, Page 6

SHADOW AND SUBSTANCE

In the course of their tour of the Buffer district the Minister of Public Works and the Minister of Labour appear to have been distributing some veritable bouquets of pious thought and exalted exhortation. When he addressed the Buffer Farmers’ Union Mr Semple was indeed the sage counsellor. There was much in what he said when, as an argument for increased production, he emphasised the great importance of the economic factor in the present war. A cabled message published yesterday furnished striking evidence of the effect which the British economic blockade has already had in cutting off from Germany supplies of important commodities. The pressure thus exerted may be expected to tell its tale more and more as time goes on. But Mr Semple was particularly interesting in his reflections on monetary inflation, a subject which members of the Cabinet have been prone to avoid in their public utterances. “If you issue money without an economic background,” he declared, “ you are travelling on the road to national ruin.” To have value, he emphasised, money must have an economic background, and he added that “ if you issue money that has no substance behind it you are on the road to inflation, which will ultimately bring a nation to its knees.” Whether or not the Buffer farmers had need of such reminders they must have recognised the soundness of the Ministerial reasoning, which, coming from a member of the Government, is iriHeed rather precious and certainly deserving of notice. For unfortunately the Government as whole has given little evidence of being equally appreciative of the importance of preserving the economic balance. If it has asked itself the question propounded by Mr Semple, “How can you create the additional value which will allow your money to expand, so that it will meet the needs of the buying and selling public? ” it has not been content to be guided by the answer which he has supplied, "By expanding the annual volume of production.” Its policy has been to spend gloriously with the idea of producing a rapid increase in consumer purchasing-power. Mr Semple did not explain at Buffer what substance there has been behind the financial process involved in the Government’s huge public works programme, to say nothing of its works subsidy and guaranteed price policies. To tread a primrose path, to pursue a spendthrift way regardless of troubles accumulating and the inevitability of a day of reckoning, to cry “ There is no wolf ” when warnings were sounded, was the easy course. Increased purchasing power would be the solution of all difficulties, and anything that seemed to create it must be good. And so it has come about, as the Leader of the Opposition has observed this week, that the belief has been encouraged, and obtains, that the Government has a bottomless purse and that the more the money extracted from it the happier everyone will be. But the unfortunate taxpayer knows what goes into the Government’s purse and the real measure of its resources. He sees the purchasing power taken away in taxation and in increased prices for goods, and realises that behind the public purse, and behind the sources of its replenishment, there is not the substance of which Mr Semple now emphasises the necessity. It would be encouraging to think that there is something prophetic in the Ministerial utterance on the West Coast, some significance as implying that the Government is taking certain discoveries to heart, and is really concerned to get off the road to inflation.