COST OF DEFLATION

Evening Post, Volume CVIII, Issue 131, 29 November 1929, Page 11

COST OF DEFLATION

MORE THAN SOCIAL SERVICE

MR. SNOWDEN AND MR. SHAW

(Received 29th November, 11 a.m.) RUGBY, 28th November. A number of questions were asked today in the House of Commons regarding a statement which was made in the course of the debate on the Unemployment Insurance Bill by Mr. Tom Shaw Secretary for War, Mr. Shaw referred to the mention made by Mr. Lloyd George, the Liberal leader, of the crushing weight of social services. But, he said, under Mr. Lloyd George's Government and under every other Government a policy had, been pursued which had led this country into paying at least £100,000,000 a year to people who had not the slightest right to it. During the war we had money sent to us at inflated rates, and we adopted after the war a financial policy of deflation, and now we were paying interest in deflated money. That was the fact that had to be faced before this country could bo put on its feet again. Mr. Shaw's statement created some surprise, as seeming to indicate a desire to interfere with the terms on which the war loan stock was held. Mr. Snowden, Chancellor of the Exchequer, replying to questi^js on the subject today, effectively disposed of any such suggestion. He said that the Government had no intention of varying the contractual obligations entered into with the holders of Government securities. The condition of all Government loans was that the Government had the option of redemption on specific dates and, of course, could take advantage in the interests of the taxpayers of any favourable opportunity of redeeming the loans or converting them at a lower rate of interest.