The Wanagnui Chronicle. THURSDAY, NOVEMBER 25, 1937. A DEPRESSION IN PROSPERITY

Wanganui Chronicle, Volume 80, Issue 280, 25 November 1937, Page 6

The Wanagnui Chronicle. THURSDAY, NOVEMBER 25, 1937. A DEPRESSION IN PROSPERITY

THE world is witnessing a curious phenomenon, namely a depression in the midst of prosperity. Put thus the situation seems to be absurd, and so it is. How comes this curious situation to have developed?

The world is suffering from feelings of insecurity as to the future, and that psychological condition is likely to bring about a real depression if the said condition continues. At the moment this mental state is registered more strongly with investors as a class than with any other section of the community and, consequently, there is a disinclination to invest. Weak holders under the influence of the present atmosphere are selling their shares, and this affects adversely people who have no shares at all. The phenomenon is interesting as well as serious, first, because despite a high general level of activity the depression complex has developed among people who have money. There is, further, no curtailment of credit—which was erroneously supposed to have caused the great depression—upon which the present development can be blamed. Bank credit is available to all who are credit-worthy, and actually there is a plethora of funds in the hands of the public awaiting opportunities for investment upon appropriate terms and conditions. Interest rates are low because of the surplus of money, while demand for consumption in almost all fields continues at a high rate. Further, there has been no reduction in wage rates bringing about a reduction in consumption—another false argument of the depression period. And finally, there has been no general curtailment of Governmental expenditure. Vv hy, then, is this depression causing such havoc? Those who have been propagating the several theories concerning the wilful generation of depressions by monetary authorities —again misnamed The Money Power”—should find in the present conditions an opportunity for further exposition of their beliefs, with modification.