WELLINGTON NEWS

Hokitika Guardian, 27 January 1931, Page 2

WELLINGTON NEWS

EXCESSIVE THRIFT. (Special Correspondent). WELLINGTON, Jan. 24. The latest scheme for driving away the depression in Britain appears to be to urge people to spend, and this takes the form of condemning thrift. A few days ago professor Reyues broadcasted a special speech in which in effect he condmned thrift, and more recently Mr Reginal McKenna, chairman of the (Midland Bank, took lip a somewhat similar attitude. For ages past thrift has been held up as a great virtue whether practised by an muividual or a nation.

But there is such a thing as excessive thrift, which would be hard to distinguish from miserliness. An individual who does not exercise a certain amount of thriftiness is no good to himself or the community, for it is the savings of the people, and of the small people, that provides the capital for new developments and tor material progress, it is the miser, the one who hoards his money, in a long stocking and withholds the actual currency from circulation who should be condemned ; the ordinary individual should be encouraged to save, and the existence of savings banks is one metnud that governments adopt for encouraging people to' be thrifty. The savings of the people are not idle for they are invariably pluced in some bank, or they are placed on deposit An building societies, but whereever lodged that money is being used for the benefit of the nation and the country. If it is ,in, the Post Office Savings ; Bank ; the . 'money is invested dri government securities, if it is lodged with the ordinary "trading banks tlie funds , are usedUby those banks for financing the trade and industry of the country, and without those deposits they would be able to do very little. When the deposits are lodged with building societies the money is advanced by way of mortgage to home builders and buyers.. There is nothing wrong with thriit, but the thrift of the miser is to be condemned.

During the war several governments issued “war saving certificates,” and more recently “peace saving certificates” have been issued. In Great Britain a national savings movement

was organised some years back, and the success, .which,,has, attended- its - efforts is reflected in the fact that sales of notional savings certificates, which were first introduced as the war-sav-ings certificates in 1916, amounted in October last to £986,896.357, representing a cash value of £775,126,835. The number of certificates sold, now exceeds £1,000,000,000. Barclay’s Bank Review states that it is somewhat remarkable that despite the severe industrial depression, sales of tiieSe Certificates throughout the curfeht year (1930) have averaged, appreciably ffiote thall a million a week, and have been greater tliftti irt ally year since 1923,

Tiio increases have not been confined to the more prosperous parts of the country, but have taken place' in a marked degree, in areas where unemployment has .(been most severe, “a fact (the Review abates) ijvhich suggests that in time of adversity people who are in worlf are stimulated to nave on an even .larger scale .ifchan when more prosper- ■ f prevail. ’’ A cable mes--1 sage/published recently stated that the King in ; , a 'communication sent to tlie I National Savings Movement of Great acknowledged his pleasure at ' deceiving tfie thousand-millionth savings certificate, commended the habit of wise spending and wise saving as of particular value at the present time, both to individuals and to the nation.

According to Mr McKenna, the present depression was due to under consumption, and yet according to figures gathered by tlie League of Nations the trade of Europe lr. its qualitative aspect is greater than it was in 1913, but Europe has been buying less; from Britain and more from other countries because Britain’s costs are higher than these of her competitors. ■ Air McKenna claimed that if monetary could •do little in the present crisis to stimulate recovery, at any i ate conditions favourable to recovery could be preserved by keeping money plentiful and cheap. It may be asked how can the great banking maintain a plentiful supply of cheap money unless the savings of the people poured into the banks in steady stream ? A remedy for the present depi ession has not yet been discovered, and several governments show a disposition to let matters drift..