The Guardian And Evening Star, with which is incorporated the West Coast Times. SATURDAY, MARCH 7, 1931. WISE SPENDING.

Hokitika Guardian, 7 March 1931, Page 4

The Guardian And Evening Star, with which is incorporated the West Coast Times. SATURDAY, MARCH 7, 1931. WISE SPENDING.

When people are urged to maintain their personal expenditure in times of trade depresison, there are those who are deeply sceptical of the wisdom of the advice. If, however, it is subjected to investigation, it will be found to contain elements of sound common sense. It has been asserted by Mr Keynes, who may be described as an economist of note, that every pound that is saved adds to the burden of unemployment. iNow ;is the time, he holds, for everybody, and especially for public authorities, to “upend/ nmgniticontly.” That is n view, however, as a contemporary remarks, which must not be taken too literally. The extent of the expenditure must be regulated by the The an s of the individual. The object which Mr Keyes has in view is to increase the money in circulation by wise spending, thereby increasing the activities of merchants, manufacturers and primary producers, and stimulating the complete social machine. The United States, with six million unemployed, vet holds almost half the world’s supply of gold. The difficulty in that countrv is that the gold is not circulating. France, the second largest holder of gold, is almost self-supporting. The standard of living is lower than in some other countries, and the reparations payments have enabled her to absorb labour in rebuilding her devastated areas. Tn spite of this aid to employment in France, the world conditions have forced themselves on the country with the result that, while unemployment was non-existent for several years after the war, it is estimated that there are now ],300.000 out of work in France. The uneinnlovment problem in Great Britain has assumed proportions that may be said to he without precedent. Yet at no time in the history of the country has there been such evidence as there now is of the practice of thrift. The small investors of the United Kingdom have accumulated savings to the value of £2,000,000,000. equal to £45 per head. It is impossible to holt] that this

manifests a tendency that is to he deprecated. What is really to be deprecated is a tendency towards a reauction of personal expenditure that is not dictated by a curtailment of the means o! the individual. It seems somewhat strange that, in times of depression, people whose incomes are not affected to the extent that they need suffer any deprivation whatever generally curtail their purchases. The consideration that influences them is intelligible enough, but, as the Economist puts it, the overwhelming factor of unemployment weighs very heavily in the scale against all arguments that can he brought for a deliberate general curtailment of ordinary budgets of personal expenditure. Again, to quote the Economist, the comments by which are as fully applicable in, the case of New Zealand as in that of Great Britain:—Salvation lies for this country not in visions of “managed insulation,” out in the reduction of costs ; retrenchment in many sections of wages, and, furthermore, unproductive State expenditure is not essential if this desideratum is to he realised: continuance of savings, particularly by corporate concerns, is necessary, in a greater degree than at present, if capital is to be adequately clump when trade recovers, and hence normal thrift is essential to continuance of employment : and, as far as it can be reconciled in these conditions, “spending ns usual,” but not “spending magnificently,” is sound policy.