COMMITTEE’S REPORT

Otago Daily Times, Issue 24432, 18 October 1940, Page 6

COMMITTEE’S REPORT

EFFECTS OF WAR Presenting its report, the committee makes the following conclusions:— “The committee has carefully considered all the evidence and material placed at its disposal. To promote freedom of discussion, the committee agreed that its proceedings and all evidence placed before it should be confidential except of course, for statistics otherwise available in public records. In making its recommendations, the committee has kept in mind the effects of the war upon our economy. While men are continuously being absorbed in military service, there is also need

for increased production. Budget expenditure has increased, and. as always in wartime, the financial policy tends to have an inflationary effect. There is an inevitable tendency for the cost of living to rise and an equally inevitable tendency for real wages to lag behind. These are circumstances common to all countries at war, leading to a state of instability, and the c:mmittee’s recommendations are designed to check these ill-effects. It should be stressed that, no matter-how war is financed, the country fights only with men and n aterials available here and now. The whole community must bear the effects of the loss of goods and services either diverted to purnoses of war or no longer produced because the men are fighting and the materials are not here. The burden should be apportioned s° that every citizen, according to his capacity and means, bears his just and proper share. A Dual Aim “ The recommendations of the committee are designed to achieve two main results. The first is to stabilise prices, wages and costs so that the cost of the war is not thrown unfairly on one group to the benefit of another. The second is to increase all kinds of production and the efficiency of every type of service which will help, however indirectly, the national drive. It is the individual working in co-opera-tion with fellow-citizens who must achieve this result. No one is exempt. The war strength of the nation is the sum total of all these individual efforts and not one ounce more. The committee can only suggest the method and only the Government can provide the means. The main task thus falls on each individual in his personal job. whether war work or civil work, to fill each hour with better production and more efficient service. Signed—A. T. Donnelly (acting chai man). A. McLagan. T. O. Bishop. G. T. Thurston. C. V. Smith. F. P Walsh. F. G. Young, W. N. Pharazyn, H. D. Acland. A. W. Croskery. E. W. Maclean, W. W. Mulholland. W. Marshall. W. S. Mac Gibbon. R. Eddy.

DANGER AHEAD RISK OF INFLATION “ In a war situation there is always a danger of inflation of the currency being resorted to as an easy method of meeting, cr partly meeting, the increased financial commitments made necessary by the war,” stated the report of the General Committee in its consideration of the difficulties confronting the country to-day. “The evidence before the committee indicates that there is for the purchasing pewer to exceed the value of the goods available for consumption, and such a position reveals an inflationary tendency. Currency inflation is the most cruel and the least scientific method of making a levy on the pec pie. It presses most heavilv on the poorer members of the community, especially those who have large families to maintain, and those on small wages or fixed incomes. Indeed, every wage and salary earner finds that the cost of living keeps ahead of his wages and thus his standard of living is reduced. “In short, if these difficulties cannot be overcome, the poorer people in the community will suffer most by shortage of goods and increased prices. The most effective method of overcoming these difficulties is to secure increased production.