FINANCES OF WAR

Bay of Plenty Beacon, Volume 2, Issue 250, 16 December 1940, Page 2

FINANCES OF WAR

MEETING PRESENT CAUSES OF DESPONDENCY MR J. M. KEYNES' CONCLUSIONS In his striking broadcast, Mr J. M. Keynes set out to meet two present causes of despondency—the fatalism which sees frightful and irremediable impoverishment after the war because of our present losses of wealth and property, and the widespread fear that, because of our Budgetary timidity and slackness of economic controls, we are heading for inflation, says the Manchester Guardian. Mr Keynes' conclusions are reassuring on both" heads, His lucid statement should help a good deal in these dark days to steady opinion in Britain and in the United States. On the first point we have history to guide us.. In 1919 the world was poorer than in 1914; the war destroyed from two to four years' normal growth of the property of the belligerents, normal development was checked, depreciation was not made good. Yet, as Professor Bowley* has described, "in about two years' time the physical destruction of capital was repaired and the equipment as a whole was perhaps superior to that in 1914 in the United States, the United Kingdom, France and Belgium.'" Germany took a little longer.