SWEDEN’S PRECAUTIONS.

Manawatu Standard, Volume LVIII, Issue 42, 18 January 1938, Page 6

SWEDEN’S PRECAUTIONS.

The Swedish Government appears to be making provision for a ‘‘rainy day” in her economic affairs, should that arise. The Swedish Minister of Finance announced recently that he was preparing plans for capital investment in the event of a new depression. This year’s surplus of £1,000,000 is to be paid into the fund. Sweden is unquestionably prosperous, or there would be no surplus, but Sweden, like other countries, is subject to external influences, and what trend these will take cannot be foreseen. That country is no doubt being guided by the eminent economist, Professor Gustav Cassels. It has been largely due to his influence that Sweden is enjoying such a large measure of real prosperity. Sweden early joined the sterling group, although there was nothing to prevent the .country linking up with France and remaining on the gold standard. Sweden and Britain do a mutually profitable business with one another. Their interests in other directions are also very closely allied. The plan of curtailing expenditure and saving the funds for offsetting adverse influences is one that can be recommended. The surplus for the year is to be the nucleus of the fund. Should conditions become adverse, the existence of a fund to meet contingencies would obviate the necessity of increasing taxation at a time when the taxpayer is ill able to bear the burden. It will be remembered that some months ago 22 Oxford professors of economics wrote to the London Times suggesting this very course of action. The American plan of spending for prosperity, which is very similar to the plan adopted in New Zealand, has collapsed. It should have collapsed long ago, but America is a big country. There must be a new plan in America, a plan that will seek to retain and stimulate the confidence of capital and not antagonise it. The world is practically waiting on the United States to put its house in order.