THE MONEY COST OF WAR

Otago Daily Times, Issue 24530, 12 February 1941, Page 11

THE MONEY COST OF WAR

TO THE EDITOR Sir,—ln your leader on the money cost of war you say: “For the current financial year it apportioned the Budget in such a way that domestic expenditure was double the expenditure for war purposes. And if it should in the coming year find that the problem of war finance has become . • • difficult, it will . . . have to admit that it must blame its own . . . extravagant programme of domestic expenditure.” The amount decided on for war purposes was the limit that this country, with its available resources of materials, manpower and equipment could spend. How, then, would a reduction of State expenditure for domestic purposes assist war finance in the coming year? A reduction of domestic expenditure would have thrown thousands of men and women out of employment, with the result that social service expenditure would have increased and the spending power of the dismissed workers would have been reduced. This, again, would affect business turnover, resulting in a reduction of national income and Government revenue. A decline in Government revenue must impede the war effort.

You base your criticism on the statement from the Economist that “victory depends on the ability to expend large enough sums (with, of course, all due economy) on the right things.” Do you suggest that the sum set aside for war this year was insufficient? You say, “There is no Fortunatus’s purse into which the Minister of Finance may dip.” This is equally true of England as well as New Zealand. War destroys the wealth accumulated from past labour, consumes voraciously the product of present effort, and pawns the labour effort of the future. You say that “ there is a gratifying lack of criticism in Great Britain of the stupendous volume of expenditure on the war.” The total was expenditure from October, 1939. to October, 1940. was about £2.600,000,000, of which £1,648,000,000 was raised by loans and taxation and the balance of £952 was raised by Treasury billsr-in other words, by' new credits.

In another article in the same issue you take exception to Ministers interviewing certain workers in Christchurch. “It is,” you say, “ a humiliating position in which Mr Webb is placing himself.” Now, just why is it humiliating for a Minister to meet workers for the purpose of discussing the economic position of the latter ana elevating to the same Ministers to meet members of the Chambers of Commerce or the employers or other business people to discuss ecortomic questions with them? You go on in a spirit of bitter sarcasm to talk about the “ Minister’s tender solicitude for those who in a variety of ways are placing self-interest above national duty.” Will you please point to one single leading article dealing with finance or economics which has appeared in your journal in the last quarter of a century wherein you placed national duty before economic class interests? You suggest that the Government should use the powers it possesses against those who are interfering with the war effort. The capitalist anti-workers’ press is indeed fortunate in that the Government is using those powers very sparingly, especially in its case. —I am, etc., Feb. 8. M. Silverstone.