The Southland Times MONDAY, FEBRUARY 13, 1939. Backwards And Downwards

Southland Times, Issue 23741, 13 February 1939, Page 6

The Southland Times MONDAY, FEBRUARY 13, 1939. Backwards And Downwards

It was hardly to be expected that the Prime Minister would grant the request made by the Leader of the Opposition for an emergency session of Parliament. The Government cannot be said to have welcomed criticism of its policies even at the best of times; and the summoning of Parliament just now, beside giving Opposition members ample scope for criticism, would have amounted to an admission that Mr Hamilton’s charges were substantially true. But Mr Savage only made himself ridiculous when, in refusing the request, he went to the opposite extreme and pretended, that the Dominion’s economic position is still entirely favourable. “You may accept my assurance that there is no drift,” he said, “but a ' Dominion-wide attempt to build on modern lines.” Evidently the Government regards the depletion of London funds and the restriction of imports as part of a “building” programme. A substantial decline in export returns means nothing to it; nor dp a fall ih primary production and an acute shortage of credit. With complete equanimity it contemplates a decline in national revenue, a heavy increase in expenditure on account of the social security scheme, and the finding, within the next few months, of £22,000,000 to meet loan commitments in London. “There is no drift.” Departmental reserves are almost exhausted, borrowing from the Post Office Savings Bank surplus is no longer possible and the suspension of the minimum reserve requirement under the Reserve Bank Act may become necessary any day now. The unemployment problem persists, and after March 31 there will be no Employment Promotion Fund to provide for about 35,000 men who are still in need of relief: the only provision so far made is £1,500,000 a year from the Social Security Fund, for sustenance.' These are some of Mr Savage’s “building” efforts, and some of the reasons for his present state of contentment. If he showed some awareness of what is happening there would riot be as much cause for alarm as there is. But both he and his colleagues continue to behave as though they have _ a world monopoly of financial wisdom and experience. Their extravagant spending was to a considerable degree responsible for the depletion of London funds; a severe restriction has had to be imposed on the use of those funds —but have they curbed their spending? There is no evidence of it. On the contrary, the talk is all of spending more. As the city editor of The Times (London) pointed out last week, exchange control will not solve the Dominion’s fundamental problem of restoring economic equilibrium. The most it ,can do is to provide a breathing space for remedial measures. The problem itself can only be solved by an internal readjustment which must involve a check on spending and a reduction of taxation and costs generally. Until the Government gives some indication that it is facing the problem, and is determined to bring about the readjustment, there will be no end to the uneasiness which exists throughout the Dominion today and which is at last beginning to penetrate to the rank and file of electors.