The Guardian And Evening Star, with which is incorporated the West Coast Times. SATURDAY, APRIL 11, 1931. SPENDING AND SAVING.

Hokitika Guardian, 11 April 1931, Page 4

The Guardian And Evening Star, with which is incorporated the West Coast Times. SATURDAY, APRIL 11, 1931. SPENDING AND SAVING.

\\ itiiin tiie past three months a controv. r.sy nas men in progress in Lolland ihiuiiginuu uie i>rilisl l Press over the relative advantages ol saving -and spending, ine discussion started with a pronouncement from that rather melodramatic publicist Mr J. Mayard Keyes, to me ifeet- that in a time ol industrial and commercial depression people do more good by spending than by hoarding money. Not only is this view opposed to the strong economic and social traditions of all ’British communities, but says an exchange, it runs directly counter to the arguments in lavour of thrift which have been reiterated so persistently in political and journalistic circles ever since the war. Naturally, the challenge issued by Mr Keynes was at once taken up, and the public discussions of the questions that Im has raised lias been one of the journalistic sensations of tlio day, Whatever be the standing of Mr |veye« us an economist, be can always claim the..merit of expressing Ins views forcibly and without ambiguity. “Many believe.” lie wrote, “that the most useful thing which they can do just now is to save more than usual. In the present circumstances that is utterly harmful and misguided. With a large unemployed surplus already available for producing capital goods, the effect of saving is to add to inis surplus.’" Therefore he urged people in general to go forth and buy goods to the best of their purchasing capacity. remembering that “whenever you save 5s von put a man out of work for it day.” This startling appeal raised a storm of protest, and Sir Josieli Stamp, as chairman of the National Savings Association, made what seemed to a large number of people an apt and telling rejoinder:- 1 He reminded the general public • that Mr Koyn.es is chairman of “a great and deserving successful insurance company.” and lie wanted to know how Mr Keynes’ advocacy of “one of the most famous wavs of saving” can bo compatible with the advice that he is now offering, to spend rather 'than to hoard. Mr Keynes promptly pointed out that he lmd allowed for the special circumstances existing to-day, and contended that the vast accumulations of capital already awaiting investment make thrift for the moment unnecessary. A more impressive presentation of the case for saving took the form of a manifesto signed by Lord Grey of Kallodon and Mr Walter Rnneiman, insisting that “public waste is the road to want and privation.” pnd urging that “it is only by living strictly within our income that we can expect to ensure a orogressive level of comfort and wellbeing” This is all reasonable and convincing enough, hut it does not meet Mr Keynes' argument quite fairly and squarely. Mr Keynes has no doubt about the value of thrift as a public and private virtue; but he is inclined to think that this is the time to spend rather than to save. Possibly if lie had phrased his advice differently, and had simply urged capitalists to invest their savings in reproductive enterprises, he would not have laid himself open to such vehement criticism. The “Westminister Bank Review” made a vigorous attack on Air Keynes, reminding him that not all forms of expenditure are equally beneficial to the community, and quoting against him J. S. Mill's famous aphorism—that “a demand for commodities is not. always a demand for labour.” But Mr Keynes did not suggest that people in general should spend extravagantly on useless luxuries. Obviously, all he meant was that industry and commerce are stagnant chiefly through lack of a steady and continuous flow of money, and that one effective way. of remedying (lie prevailing depression would he to circulate money freely; and from this point of view his arguments are indeed hard to gainsay.