THE OTAGO DAILY TIMES WEDNESDAY, SEPTEMBER 27, 1950. THE AUSTRALIAN POUND

Otago Daily Times, Issue 27505, 27 September 1950, Page 6

THE OTAGO DAILY TIMES WEDNESDAY, SEPTEMBER 27, 1950. THE AUSTRALIAN POUND

Spurred by the dramatic rise in prices for fine wool, inflation in Australia has now reached the stage which demands prompt Government action. What that action should be, however, represents a problem on which no unanimity of opinion can be attained, even within the Federal Cabinet. The Labour Party, anxious to create a diversion to cover its shabby showing over the anti-Communist Bill, is recommending a referendum on price control, but it has as yet given no assurances that its members would acquiesce in a policy which would necessarily peg wages as well as prices. In the Coalition Government the Liberals are vigorously urging an upward revaluation of the pound as a panacea for inflationary ills, though this course is being resisted by the Federal Treasurer, Mr Fadden, and his followers of the Country Party. One possible counter to the inflationary spiral was recently postulated by Sir Douglas Copland, vice-chancellor of the Australian National University, who proposed that a tax of 33 1-3 per cent, should be charged on the prices obtained for wool, two-thirds of the proceeds from this tax to be paid into a stabilisation fund for the benefit of the growers and the remaining third to be used to stabilise domestic prices and promote the long term interests of the industry. The proposal, which received considerable publicity and close attention from the Federal Cabinet, has aroused such widespread opposition that—as we announced in a cable message yesterday—the Cabinet is believed to be unwilling to proceed with such a scheme. Apart from the fact that the plan has drawn protests from many sections of the community because of its discriminatory nature the graziers have been particularly indignant at the suggestion that they should be mulcted to correct a condition which is largely the result of the current shortcomings of secondary industry. They admit that imposition of the levy might help to stabilise some prices, but point out that action directed against a single commodity cannot possibly cure inflation, and that the levy might produce undesirable repercussions both at home and abroad. The proposal to appreciate the Australian pound, which is now reported to be receiving consideration, has been condemned by Sir Douglas Copland as “ a mirage, having a fatal attraction for the less discerning, which will disappoint even its most fervent followers in the long run.” Revaluation would undoubtedly have the effect of absorbing some of the excess wool profits but it might seriously affect prices of other primary produce which is at present made profitable only because of the debased value Of the Australian pound. Revaluation would also expose Australia’s manufacturing industries to sharper competition from overseas. So bitterly opposed is the Country Party to the principle of revaluation that the possibility of a breach developing in the Coalition is freely predicted should the Liberals attempt to force the issue. In this country (which, like Australia, has suffered from the inflationary practices of Socialist financing), there will be considerable respect for the view- of .the Federal Treasurer that the position' will not be materially bettered by reliance- on any one remedial measure. Only by a concerted attack on every source of inflation, and especially the industrial field, will progress towards Stability be achieved.

SOCIALISTS AT SEA While it would be petty to welcome dissension within the British Parliamentary Labour Party, and error to interpret the internecine struggle as a weakening of Socialism, there are implications in the unhappy iftate of the Government which deserve examination. At the present time Labour in the United Kingdom is, like Labour in New Zealand, rent by factional differences. The attack on the international aspects of Labour Federation policy by Mr Mackay, a Labour M.P., suggests that the division is among right, left and centre, and that in turn illustrates the extent of the divergence of views within the Socialist organisation. Not so long ago—in June, 1948—the Labour Party was busy disciplining and expelling members of the Parliamentary Labour Party for proCommunist attitudes; a year later Jt expelled Mr L. Hutchinson, M.P., for criticising the Government’s “disastrous” foreign policies; now Mr Mackay is to be “asked to explain” his vigorous pamphleteering denunciation of the party’s wavering approach to international problems. All this indicates an uneasiness in the movement which manifests itself in strange and sometimes extravagant ways. But the Government itself is so strange and extravagant in its attitudes that these acts of apostasy have a sort of logic. There is possibly nobody who dislikes Communism more than Mr Attlee. Yet a few days ago we find him condemning Russia in these peculiar terms: We little thought that danger to world peace would come from people who profess to call themselves Socialists. . . .

When, two weeks ago, Dr Edith Summerskill, a member of Mr Attlee’s Cabinet, wished to advocate military aid for Yugoslavia if that State is attacked by Russia, she chose this extraordinary way of saying so:

I deplore the fact that the newspapers and irresponsible people keep shouting that this [the war in Korea] is a war against Communism. It is a war against unprovoked aggression.

The only pertinent comment upon such utterances would:seem to be, not “ Where is Socialism going? ” although the British Government obviously needs to be asked that question—but “What do the Socialists think Socialism is? ” If these two leading lights of the Socialist Government have no more sense of reality than to interpret their policy as a sort of negative, or reformed, type of Soviet Communism, then

the welfare of Great Britain is in the hands of leaders who are not just careless of their country’s interests in their attachment to doctrinaire creeds, but are irresponsible enough not even to understand what these creeds mean. It is Great Britain’s tragedy that people ■with such woolly-minded ideas control her destinies today.