FINANCING THE WAR

Evening Star, Issue 23384, 29 September 1939, Page 2

FINANCING THE WAR

WHAT WILL NEW ZEALAND 00 ?

DANGERS OF LOSING ECONOMIC BATTLE “ We dare not fight this war against Hitlerism on a debit system. Normally a monetary system of debit and credit is perfectly sound tor a peacetime economy, provided it is not abused, but we must remember that war-time economy changes the whole of our economic purposes If we fight this war by building up debts not represented by productive wealth I think that we shall go a long way towards losing the war economically, a tragedy which would be almost as bad as losing it physically.” For that reason Mr 11. C. Burgess appealed to members of the Dunedin Junior Chamber of Commerce last night to give serious consideration to the problem of financing the war, particularly emphasising the necessity of mobilisation of all resources and canvassing the suggestion of a dictatorial control of finance, production, and other work on the home front,. thereby constituting wdiat would be in effect a second line of defence. The chamber agreed to consider the matter, and at a later meeting will appoint committees to explore various problems and possibilities of the scheme. “ This country has not yet finally decided how it is going to use its resources, human, material, and moral, in its war effort,” said Mr Burgess, who stated that the purpose of his address was not so much the suggestion of a plan for the best and fairest way of using them, but rather what should first be done before such a plan could be evolved.

CREATING DESTRUCTIVENESS. “ The (purpose of war-time economy is primarily to create destructiveness with which to destroy the enemy. This includes the creation of export wealth, whereby essential services can be purchased from foreign countries and the maintenance of as high a standard of minimum income for the population. Secondary to the main purpose is that of preserving so far as possible the peace-time structure so that when peace, comes the nation may resume normality as soon as possible. “ In war-time economy there should bo equality of sacrifice. The magnitude of the task is recognised, and as a result our efforts should aim at being our maximum. The ivar will be fought out of our real income, except to the extent that wo use overseas goods and services we cannot pay for by exports and that we diminish our own capital. Our real income will be taxed to its utmost.in our efforts. As a result of the latter, the nation ns a whole cannot become richer during the war, and in all probability will become poorer. Accordingly no individual should become rieher; that is, that monetary book entries should not allow individuals to increase their wealth at the expense of their follows. Our monetarv system should reflect these facts and not be abused so that it records the piling up of war debts—fictitious debts which merely reflect the transfer of .it;f ui ‘pnu ‘sicnpiAtpui uaaAvpq ippiaAi future, representing no relative real wealth and creating an impossible load on the economy of the country. Wo dare not fight this war on an abuse of a debit and credit system. It will merely create conditions here similar to those which lead to Hitler’s rise in Germany and will make our efjirts in vain. “CONSCRIPTION OF WEALTH ” “ The use of our resources, human and material, means conscription. If we conscript men to fight—and in fairness to all we should —and men and women to work—and in fairness to the fighters we should—the use of material wealth automatically follows. ’’ continued Mr Burgess. “ The conscription of wealth does not mean the taking of money and the spending of it. Money is merely the title to wealth It means the use of that wealth—namely, the land, factories, machines, farms, the live and dead stock, and the materials. “ We have logically led up to an economy of conscription of all our resources. This does not say that such an economy is' possible, but I urge that it should bo examined to learn if it can be adopted, or to find out what alternative is possible. As to the machinery which would service such an economy, it is to be noted that peacetime markets and money would no longer be necessary. The reward of individuals would not need to come from price. After providing everyone with a reasonable minimum standard of living and creating destructiveness to defeat the enemy, it is certain nothing further would be able to be created to give anyone additional reward. PUBLIC MOBILISATION. “ The simplest form of such an economy would be for everyone to be enlisted either in the Army as fighters or in the working companies as producers. Money would be limited to currency for current needs, for there would be no saving, except by the State, if at all. Money would not flow from the sale of goods in markets, but would be issued for current needs by headquarters, which would be recouped by the purchase of current needs in what we shall call ‘ canteens.’ Production would not be diverse to satisfy markets, hut limited to satisfy the needs of the ' canteens.’ The peace-time economy could be put into cold storage intact, recorded in registers, All contracts would be arrested—life insurance, rents, mortgages, sale and purchase of goods, banking, and money as we now know it. COMPOSITION OF WORK BATTALIONS. “ What we shall call the work battalions would best bo a continuation of the present institutions, each trade unit or group of similar trade units could be made responsible for the_ particular effort asked of it. The railways and the post office are examples of large efficient organisations wuiich could be devoted to war-time purposes. Then the moral effect, here and in England, would probably be enormous. Everyone would be working for the common end. ‘‘ Probably our most notable contribution to'.England would be to give her supplies as cheaply ns possible, and in abundance. Organised as described, it might surprise us what we could do and what a moral support we would give the Mother Country, whose people must bear the brunt of this war and whose taxes have brought the protection without which our existence would be precarious.”