HOLD UP OF TRADE.

Timaru Herald, Volume CXXXVII, Issue 19300, 29 September 1932, Page 10

HOLD UP OF TRADE.

To the Editor of “ The Timaru Herald.” Sir, —There are signs that progressive business men are beginning to realise that money is not for hoarding but for spending. Trade is good when money is moving with the maximum of freedom from one pocket to another by a recognised process of producing and consuming. Any attempt to hold up this process is bad for trade. The process is being held up at the present moment. Although there are numerous theories as to the cause of this holdup, and numerous remedies are suggested, there has been no general agreement upon one or the other. The economic situation is a babe] of conflicting shibboleths in which such terms as “reparations,” “moratoriums,” “retrenchment,” “protection,” “freetrade,” “rationalisation," “economy,” “deflation,” and “inflation” jostle each other for a place in the sun. The ludicrous thing is that many of these terms cancel each other, and most of them are red herrings in a high state of decomposition.

The essence of the trouble is that we have rationalised production without rationalising consumption, with the result that we have produced a famine in spending power, otherwise the shortage of money. To put it another way, we have treated money as if it was static, when as a matter of fact money is only valuable when it is dynamic. Money is a means of exchange, and unless it is being used for that purpose it is not functioning. At the present moment forces that are not fully understood are limiting the uses of money, that is to say, reducing the spending power. This is a matter of vital concern to all retail distributors who live on dynamic and not on static money. Reta’l distribution lives on spending. No better action could be taken by retail distributors at the present moment than a policy of increasing spending power, in other words, making money function. When we carefully examine the facts as to the depreciation in the selling price of the world’s commodities, we are entitled to ask ourselves whether we are not a good deal responsible for the low price ruling. Dozens of manufacturers have centred their efforts on mass production and turning out quantities, but few r executives have ever thought how essential it is at the same time to centre their efforts on increasing their methods of distribution. The sickness of the -world's raw material market is partly due to the fact that the production of goods which has been increased by mass production, has not been distributed on a mass production principle. In other words, it is time to reorganise our methods of distribution throughout the world, especially when we are faced with statistics that prove that there are millions of people in the Near and Par East and other parts, who are starving, lack shelter and clothes, while at the same time we find the world’s granaries and woolsheds burdened with stocks.

If the financiers of our day could meet the producers in a conciliatory spirit, and thereby arrange for the distribution of the world's surplus raw materials, we would find that much of the economic sickness that exists today alleviated, and at the same time mankind would produce a better existence for those who are in w r ant.—l am, etc., J. G. D. September 27, 1932.