Psychological.

Star (Christchurch), Volume XLIV, Issue 72, 25 March 1931, Page 6

Psychological.

To the Editor. Dear Sir, —The latest mails from Britain bring journals containing full reports of the annual addresses by the chairmen of the principal British banking houses. Of these the speech of Mr M’Kenna, an ex-Chancellor of the Exchequer, is perhaps the most noteworthy, because what he writes, more particularly of Great Britain and Europe, is •equally true of our own country. After discussing the movement of gold and showing how, because of their willingness to grant further loans, both America and France have been “ compelled to accept large quantities of gold,” Mr M’Kenna adopts an entirely new role for a banker and, leaving economics alone, he launches out into psychology. He gives-.it as his considered opinion that at bottom it is a change in the minds of men rather than the movement of gold or the course of harvests that has caused the depression. From the stockmarket collapse there developed “ a pyschology of fear,” and instead of the gold standard working automatically as it did before the war, there has developed an almost complete impasse in monetary matters. In this he is a desciple of Mr J. M. Keynes, the great economist, who has been broadcasting an exhortation to spend rather than to save, and who declares that trade will not improve until merchants and manufacturers expect to make profits. Mr M’Kenna himself says that “ business becomes better when people feel better about it; the expectation of profit is the natural stimulus to enterprise.” Unbounded optimism is as unjustifiable as hopeless pessimism at a time like the present, but the “ fearful souls ” who can see nothing but trouble ahead should take heart at the pronouncement of such an authority.—l am, etc., LOOK UP.