EXPENSES AND VALUES

Wanganui Chronicle, Volume 74, Issue 180, 1 August 1931, Page 5

EXPENSES AND VALUES

THE WAR DEBT LOAD UNEMPLOYMENT PROBLEM Mr George Shirtciiffe, chairman of the Wellington Investment, Trustee and Agency Co., Ltd., addressing shareholders of that company, remarked that the whole world has been, and still is, passing through a period of financial depression, such as probably no living person has previously had knowledge ol —a depression that is probably a definite aftermath of the Great War. Staggering under the weight of colossal war debts, the nations that participated in the war have been so weighted down by the heavy taxation necessary to meet their annual obligations that the spending power of the people has been curtailed to such an extent as to largely destroy that coniioencc on which L suggest all credit is based. This has been reflected m the greatly decreased values of all primary products, on which the prosperity of this Dominion so largely depends. This, in turn, has led to the necessity for a drastic reduction in costs of production by the cutting down of wages and other ex penses and the utilisation of laboursaving machinery. It is largely the high production costs that have led to the present grave unemployment problem, and this can only be effectively dealt with by bringing them and overhead expenses generally more into line with the present and prospective low values of our primary products. Confidence and Credit ‘‘A general return of confidence, to be followed by an extension of credit,” Air Shirtcliffe continued, “should, 1. suggest, bo tfle aim of those powerlull world interests—political, financial, and commercial —that control the destiny! of the people. But a distinct aid to I the restoration of confidence, leading to a condition of moderate prosperity, would be the lightening of the war debt load to which 1 have referred, and in this regard the recent postponement by the United States or al; war debt payments of principal and interest for one year offers a gleam oi daylight that may yet lead the nations into the sunshine of renewed prosperity. At the worst, it will give temporary relief to the sadly over-taxed nations, and at the best the result of the experiment may well be so encouraging to the principal creditor nation that some permanent readjustment of the war debts may in its own interest be considered advisable. “In the meantime, 1 suggest that the watchword of this Dominion, both nationally and individually, must be ‘Economy and ’ The Dominion should live as far as possible on its own products and manufactured goods. Every £1 saved in oversea expenditure is an extra £1 for general internal circulation, and will do its work silently to assist in the restoration of confidence and the further productiveness of the primary and secondary industries. With a general adoption of such a policy of “cutting one’s coat according to the cloth available,” I feel much would be done towards promoting a gradual return of the Dominion to a condition of renewed hope.

“A Magnificent Lead” “In this regard the present Govern raent has recently given the country a magnificent lead, which will no doubt be very generally followed, and which should result in such a reduction in the cost of living that the salary and

wage earners should be little or no worse off as regards their ‘ real earn ings.’ “While I would prefer not to touch upon politics in my remarks, 1 cannot, refrain from expressing the opinion that the paramount necessity for a nationa rehabilitation policy calls for the establishment of a stable Government, strong enough to withstand the attack of any sectional interests. Given this, I have no doubt that the good work already commenced will continue ami operate for the ultimate great benefit of the community as a whole. Causes of Slump “At present the principal factors that appear to me responsible for the slump, and that are more or less retarding a return to prosperity, are: — (1) Excessive national, local body, and private expenditure, for which economy is the only remedy. (2) War debts, which, if readjusted, would do much towards the desired end. (3) The policy of high protection adopted by most importing countries in the endeavour to make each a watertight compartment, and which is greatly hampering the free interchange of commerce. “The effect of the first of these factors can be minimised by the economy efforts of our own Government and people, but the other two factors are international, and the steps necessary to minimise their influence may well be debatable from each nation’s standpoint, and at the best slow in their application. “But the one encouraging indication is that the general situation has become so desperate that the whole world is awakening to the fact that drastic remedial steps are necessary and that such action will be taken and gradually put into effect I have no doubt. If that view be correct, none of us should despair about the future, and in the meantime we must all just, keep on pegging away at our jobs in a spirit of confidence that all will come right in the end. There can be no ‘short-cut’ to the broad highway of prosperity, and only by dogged perse verance and self-denial can that desirable position be again reached.’’