SAVING, ALSO SPENDING

Taranaki Daily News, 26 February 1931, Page 5

SAVING, ALSO SPENDING

ECONOMY’S TWO ASPECTS

GOVERNMENT WILL PRUNE

LABOUR LEADER’S PLANS

FINANCIAL CO-OPERATION British Wireless. Rec. 5.5 p.m. Rugby, Feb. 24. Reference to the general economic outlook was made by the Prime Minister, Mr. Ramsay MacDonald, at a dinner given last night by the Birmingham Chamber of Commerce in connection with the British Industries Fair.

The present problem, said the Prime Minister, was not one of production, which was more efficient in the world than ever before. There .was no problem in consumption; people were prepared to consume more than they ever consumed before. Where the fault lay was that between production and consumption something- came in.. Prices got dislocated for some reason or other. The primary -producer could not get prices that enabled the factories to be busy, and until they laid their heads together and discovered how production and consumption could be related to each other more directly those great factors would continue to disturb the markets of the world.

That was a world problem, but within that world problem there was a national problem. Britain’s taxation was heavy—deplorably heavy. Half oi it was to keep the nation’s word as its bond, the other half was subject to public opinion, which was intelligent enough to approve the policy. The House of Commons with the consent of the Government had set up a committee to review public expenditure. He hoped the committee would be expeditious in its work. The Government was so convinced of the importance of .expenditure that there would be no time lost in getting that committee into working operation. Abuses must be pruned out. Cuttings must be, not by rule of thumb, but they must be suitable in the moral sense at> well as productive in economic results. In economy they had to remember that they were faced with a double-edged problem. Economy did not merely mean saving; it meant expenditure of the right kind. Expenditure and wise saving were the two aspects of economy, because in times like those the country ought to be prepared for expansion of resources and increase in efficiency. ft FRANCE AND BRITAIN IN ACCORD

The official statement on the recent disetis&ion# between the British and the French Treasury experts says the object has been a frank and cordial exchange of views on the principal financial questions of interest to both countries with a view to promoting a policy of financial co-operation in. the existing World-Wide depression. The underlying causes of exceptional gold movements between London and Paris have been discussed. It has been confirmed that French authorities in no way welcome abnormal gold movements and have been anxious so far as possible to avoid measures tending to bring them about. The French Treasury, while not considering that the methods of managing the public funds iri/ France have had the influence sometimes attributed to them, has nevertheless readily stated its intention of taking account, consistent with its own needs, of the repercussions Which its operations might have on the monetary market. It was agreed that the two Treasuries should keep in touch ori questions arising from reports of the gold delegation of the League pf Nations. It was also agreed that cardinal importance attached ■to the resumption of foreign lending on A normal. scale by creditor countries, and the French authorities have on many oceaidbris made known their desire to encourage foreign spending bn the Paris market, but it Is recognised that the present credit difficulties are largely due to lack of confidence of investors, and that.it is essential that borrowing countries should themselves take all possible riieasures to restore confidence. Steps to 'promote effective co-operation between markets with a view to loan operations Would contribute to alleviate the. existing depression, and all possibilities should be examined. , The statement refers to the Leagues discussions with a view to facilitating agricultural credits in Central and Eastern Europe and expresses the hope that practical results may be realised at an early date. It adds that the conversations have not aimed at definite in.ter-provineial agreements, . but have enabled contact to be established on questions affecting the financial arid economic interests' of both countries, which will be maintained and the conversations Will be renewed as circumstance requires.