Evening Post. THURSDAY, OCTOBER 17, 1940. WAR AIMS AND ECONOMY

Evening Post, Volume CXXX, Issue 94, 17 October 1940, Page 10

Evening Post. THURSDAY, OCTOBER 17, 1940. WAR AIMS AND ECONOMY

The first impression gained from studying the report of the committee of the Economic Stabilisation Conference is that the presentation of one report, instead of a series of majority, minority, and dissenting reports is a creditable achievement. Satisfaction with this, however, must be modified by recognition that, while agreement has been secured in part by a sori of economic truce, it is also an agreement which leaves unsettled some of the most difficult economic issues. We do not say this in disparagement of the committee's work. II the views of organisations and persons represented on the committee are taken into account, it must be admitted that their agreement upon a series of general recommendations is proof of readiness to modify policies and aims to secure jmity of effort. At the same time the. iact must be faced that the agreement does not go be- [ yond a certain point and beyond that ' point greater difficulties are to be found.

As an illustration we may consider the recommendations affecting public and private expendfiture. The committee aligns itself strongly and definitely against inflation. "Currency inflation,' 1 the report stages, "is the most cruel and the least Scientific method of making a levy on the people. It presses, most heavily on the poorer members of the. community, especially those who have larga families to maintain, and those* on small wages and fixed incomes." This is. joined to a warning that the danger is real and near. "The evidence before the committee indicates that there is a tendency for the purchasing power to exceed, the value of the goods available for consumption, and such a position reveals an inflationary tendency." But on specific measures for equal- J ising purchasing power and consumable goods the committee is less definite. It recommends increased production, to be secured by (1) an adequate supply of raw materials; (2) the best possible use of available labour; (3), additional hours of work, where found necessary. On public expenditure,, which, represents the distribution, of a great volume of purchasing power (besides, being; an important cost factor) the committee is even more general. It recommends merely "that all State and local body expenditure be carefully/ surveyed, with, the object of effecting redactions and economies •whenever possible.' 8

On the stabilisation, of costs, prices and wages (and it was principally to •secure tliis. that the conference was summoned) it cannot be said that great progress has heen made. "The committee is agreed," the report states, "that it is. not possible to stabilise money wages unless essential commodities are available at prices fixed for the same, period as money wages. It therefore recommends that,, in addition to wages, salaries,, and rents,, the prices of the fallowing- categories of essential commodities and services be stabilised: essential foodstuffs, essential standard articles of clothing-,, footwear, and household necessities; public services, fuel, and light." But at what point is the peg to be put in? Wages have been raised, and there have been inescapable additions to costs.. Are the services and commodities named to carry those higher charges and not pass them on, or, where they are passed on, are wages to be raised again? Also,, what of the sections that are now lagging behind in pay or returns—farmers, business and professional people, and those who are not covered by the general order for wage increases to award workers? Are they to have their returns stabilised while they are very much the losers? It seems to us that the committee, in stating thus baldly tiiat "it is not possible to stabilise money wages" unless prices are fixed,, leaves untouched the big problem of how the inevitable reduction in living standards due to war and the withdrawal of men from production is to be shared. It implies that the sections, whose wages are fixed by public means .are to receive equal commodity wages. This means that the unprotected classes must make greater sacrifices.

Sacrifice is inevitable,, and it must be equally borne. This must be understood and faced. In saying this we do not overlook the Implied recommendation of the committee that a halt in rising wages shall be made and that all endeavours be made to check costs. It is possible that some of the recommendations, for a check on costs will

yield valuable results. But if the pro-duction-increasing measures (which are only generally expressed) do not make good the shortage of goods, then it is impossible for one section to have as much as before except at the. expense of other sections. The necessity for united effort and common sacrifice is expressed by the committee, and the committee itself has given an example of how measurable agreement may be obtained by reasonableness. An; equal measure of reason and sacri-j fice may fairly be asked from the! whole community.