The Dominion SATURDAY, JUNE 24, 1941. THE RIGHT PERSPECTIVE

Dominion, Volume 37, Issue 229, 24 June 1944, Page 6

The Dominion SATURDAY, JUNE 24, 1941. THE RIGHT PERSPECTIVE

It would serve a useful purpose if the Government were to issue, as an official paper, that part of the address of the chairman of directors of the Bank of New Zealand, Mr. A. T. Donnelly, dealing with national issues. The references to the bank and its operations could be omitted, but, these well-balanced views on the necessity for increased production, the factors that tend to threaten the stabilization policy, the adverse national effects of the hoarding of currency and the statement regarding post-war conditions and wartime controls should be read by all. Mr. Donnelly presided over the conference which, at least to some extent, determined the stabilization policy of the Government and probably no one is better qualified to draw attention to its objectives and to ’its difficulties. The greatest threat undoubtedly conies from the purely sectional demand. If it is granted it does not niake any more consumable goods available, and inevitably increases the pressure on price levels. It has been said that when supplies are limited the power of any section to get more can only mean the inability of some other section to get its just share. The bank chairman mentioned the section that inevitably would suffer —“the middle and small fixed income classes whose rewards have gone up little if at all since tlie wqr began.” They are the people who have been hardest hit in recent years, the victims of the prolonged delay on the part of the authorities in introducing a stabilization scheme of any kind. The necessity for a degree of flexibility in connexion with stabilization was stressed, but there is a very real danger here of the door being opened to abuses. The only adjustments that could be justified are those which would prevent real economic injustice to any section. It has been well said that “a wartime economy means doing without.” and probably the success of any scheme could best be judged by the degree to which it has distributed the duty of doing without throughout the community. The Dominion cannot afford to ignore the warning of one who-was so closely associated with the establishment of a stabilization plan, and whose opportunities for studying the effects of its operations are so exceptional. “The danger of a break,” Mr. Donnelly remarks, “is now real and close.” The Government must regard the statement as a challenge to prompt action. It has by recent decisions increased the degree of flexibility in the scheme, but has not, and cannot, escape full responsibility simply by transferring the exercise of the power to the Arbitration Court. The best bulwark that could be provided is that of an informed public opinion, and it is because this address states the inescapable effects of inflation, points to the sections of the community that would suffer first and most, that it should be carefully studied. What the community cannot afford to do is to ignore this frank warning of a very real danger.