CONTROLS AND GOOD SENSE OF PEOPLE

Chronicle (Levin), 15 July 1946, Page 5

CONTROLS AND GOOD SENSE OF PEOPLE

w Received Sundav, 7.5 p.m. , LONDON, July 12. ' Subsidies and the increascd volumei of money iu rirculation iu New Zealand wero coinnienleiL tm by Sir Sydney , Parkes, cbairman of tlie National Bank of New Zealand, m his annual state- j ment. I Remarking that New Zealand emerged from the war in a favourable eco'noniic position, lie says that inflationary tendeneies were held in eheck by stabilisation and price control, sup,i ported by Government subsidies. "The iucrease in the amount of subsidies is eausing tlm authorities much concern, " he said, "but up to the present the view has been held that it is better for the coniinunity to bear the cost of the subsidies tlian to suffer the efi'eCts of increased prices of essential Commodities. Sooner or later this will have to enl, or at ieast to be modified, and . the position must be faced that the abandonment of subsidies will lead to higlier prices and a demand for higher wages. j "There is another factor in the econoniv of New Zealand which must not be (iisregardeil. During tlie war there was a great iucrease in tlie volume of money in circulatiou. Notes held by the public and baiances in the Reserve Bank and ihe trading banks increased threefold. In addition, there has been a great iucrease in savings bank de- ; posits. This large addition to the volume of spendable money presents ! dangers which can only be avoided bv j a gsystem ofb e^nfrols-, .thfe ypntinuation j "o^hayitigw; a^dydlie |gabd -^eirse of the j "people. ? ThCse musl coati nue, until j •there at-e Sufficient eonsumer goods to | permit of some relaxation."