The Waipukurau Press. PUBLISHED EVERY EVENING. THURSDAY, APRIL 20, 1933. POLITICAL SOPHISTRY

Waipukurau Press, Volume XXVIII, Issue 98, 20 April 1933, Page 4

The Waipukurau Press. PUBLISHED EVERY EVENING. THURSDAY, APRIL 20, 1933. POLITICAL SOPHISTRY

"The point of the discussion in the House of Commons, of course, was that the effect of depreciation was to wipe out the advantage of preference for British goods,” observes the "Christchurch Star” apropos an aspect of the advent of higher exchange to which we have on several occasions made reference. ‘‘Mr. Coates’s

sophistries in reply to this hard economic fact are quite unworthy of a responsible Minister, and will not go down even with the most ardent wellwisher of the Dominion in the Old Country. He says that the tariff preference on imports is not affected by the variation in the exchange rate, but nothing could be wider of the mark. The increased exchange represented an all-round Customs increase of 15 per cent, on all imports —a clumsy, unscientific impost covering luxuries and necessities impartially. The existing tariff in many cases was already prohibitive, and the percentage of preference was not a relative factor in the discussion. The qtfestion whether British goods can be brought to New Zealand, in fact, is determined not by any margin of preference, but by the actual tariff wall which they have to surmount, and therefore it requires only the most elementary knowledge of business or economics to see that New Zealand’s deliberate currency depreciation is contrary to the spirit of the Ottawa Agreements, and must have a very unfavourable effect on New Zealand’s credit, and, above all, her sincerity in the coming discussions that are supposed to give effect to those agreements.”

SPENDING ESSENTIAL ‘‘When the question is raised whether a particular piece of expenditure will make it necessary to increase taxation, it is not enough merely to compare the prospective money yield of the proposed investment with the interest, payable on the money borrowed to finance it,” says Professor Pigou, of King’s College, Cambridge, in a letter to ‘‘The Times.” ‘‘lt is necessary also to bring into account the savings that are made in unemployment benefit. Thus, if a new ship costs £1,000,000, and because of the new employment directly and indirectly created in building it, the net cost of unemployment. relief is diminished by, say, £200,000, the prospective return ou that ship should, from the point of view of the community as a whole, be balanced against the interest, not on a million, but on £BOO,OOO. In different circumstances the savings on unemployment benefit due to new enterprise will be different. If, by indirect psychological reactions, confidence is stimulated and a cumulative movement toward expansion started, they may be enormous. These are matters of speculation. But there is enough of certainty for one definite conclusion. If an enterprise is likely to fall short by only a little of being directly remunerative to the investor, it is sure to be remunerative in a substantial degree To the community as a whole. When in doubt, therefore, do not suspend judgment; above all, do not contract. When in doubt, expand.”